WASHINGTON – U.S. service companies grew in February at the fastest pace in a year, buoyed by higher sales, more new orders and solid job growth. The gain suggests higher taxes have yet to slow consumer spending on services.
The Institute for Supply Management said Tuesday that its index of non-manufacturing activity rose to 56 in February from 55.2 in January. Any reading above 50 indicates expansion.
The report measures growth in industries that cover 90 percent of the work force, including retail, construction, health care and financial services.
A solid recovery in the housing market helped drive the index hiring.
Service firms also kept adding jobs last month. A measure of service-sector hiring fell only slightly after reaching a nearly seven-year high in January.
“This survey does bode well for both activity and employment in the second quarter,” Paul Dales, an economist at Capital Economics, said in a note to clients.