Economy

US services sector activity accelerates in July: Markit

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Activity in the U.S. services sector held at its highest level in 4-1/2 years in July, though readings for new business and employment growth weakened, a survey showed on Monday.

Financial data firm Markit said its preliminary services Purchasing Managers Index was 61.0 in July, unchanged from June and above expectations for a reading of 59.8.

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A reading above 50 signals expansion in economic activity, and June's reading was the highest final reading since the survey began in October 2009.

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The services sector continued to add employees, though at a slower pace. The employment index fell from 56.1, the fastest rate on record, to 52.8 in July. The new business subcomponent also fell from June's record level.

"While a cyclical upswing appears underway across the service sector, the latest survey provides some indication that a smoother ride is not yet fully entrenched," said Chris Williamson, chief economist at Markit.

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"Nonetheless, service sector companies continue to perform strongly against post-recession trends, and overall the latest manufacturing and services PMI surveys suggest that the US economy has enjoyed a strong start to the second half of 2014."

Markit's final composite PMI, a weighted average of its manufacturing and services indexes, dipped to 60.9 from June's reading of 61, a level that also represented a record high for a final reading.

By Reuters