America’s Service Sector Activity at 16 Month-high

US service sector activity gained momentum in July as new purchase orders rose to a record high but hiring fell, supporting views that the labor market recovery is faltering amid an increase in new COVID-19 cases nationwide.

The Institute of Supply Management said on Wednesday that its index of activity outside the manufacturing sector rose to a reading of 58.1 last month, the highest level since March 2019 and up from 57.1 in June.

The index fell to 41.8 in April, the lowest reading since March 2009.

The services sector accounts for more than two-thirds of economic activity in the United States.

 Economists polled by Reuters had expected the index to rise to a post 55 in July.

The services sector’s new purchase orders sub-index jumped to a record high of 67.7 in July, from a reading of 61.6 in June. But the employment sub-index fell to 42.1 last month from 43.1 in June.