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US service sector grows at faster pace in July

(Xinhua)
Updated: 2010-08-04 23:32
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WASHINGTON - The US service sector grew in July for the seventh consecutive month, at a faster pace than recorded in June, an industry research group reported Wednesday.

The Non-Manufacturing Index (NMI), which measures activity in the service sector, rose to 54.3 last month from 53.8 in June, the Institute for Supply Management (ISM) said in its monthly survey of the service sector. Economists had expected a reading of 53.0 for the month.

A reading above 50 indicates the service sector is generally expanding, while below 50 indicates contraction.

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The index is closely watched because the service sector absorbs about 80 percent of the US non-farm workforce, and is a key indicator for the overall health of the economy and labor market.

The index showed that new orders, a signal of future business, grew faster last month. Another encouraging sign was that employment activity in the service sector grew in July for the second time in the past three months, and the second time since December 2007.

Thirteen industries reported growth in July, including real estate, entertainment, information and others, while construction and finance were among the few industries that reported contractions.