WASHINGTON – The U.S. service sector, which employs nearly 90 percent of the work force, grew in January at the fastest pace in five years, a sign that hiring could pick up soon.
The Institute for Supply Management, a private trade group, said Thursday its index of service sector activity rose to 59.4 last month, up from December's reading of 57.1. That's the 14th straight month of growth. Any reading above 50 indicates expansion.
The report follows a strong reading on Monday from the institute's manufacturing index for January, which rose to its highest level in nearly seven years.
The service index measures a broad sector of the economy, including retailers, hotels, health care companies and financial firms.
The institute's services employment index rose to 54.5, the highest since May 2006. The employment indexes in the manufacturing and service sector indexes both rose in January, a positive sign that the economy may soon generate more jobs.
The report's index of new orders jumped to 64.9 last month, the highest in seven years. That's a sign that services firms will keep growing.
The index plummeted to 37.6 in November 2008, at the height of the financial crisis. The sector contracted for all but three months in 2009. The index then topped 50 for all of last year.
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