The U.S. services sector expanded at a faster clip in July than June as employment and new business growth accelerated, an industry report showed on Tuesday.
Financial firm Markit said its preliminary or "flash" reading of its Purchasing Managers Index for the services sector rose to 55.2 in July from the final 54.8 reading in June, slightly beating the 55 level expected by economists in a Reuters survey.
A reading over 50 signals expansion in economic activity.
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A subindex measuring new business at service companies rose to 56.8, the highest since April, from 56.3 in June. The employment component edged higher from last month.
"The sustained strength of economic growth is continuing to feed through to the labor market. The surveys' hiring gauges point to another bumper month of impressive employment growth in July," said Chris Williamson, chief economist at Markit.
Markit's "flash" composite PMI, a weighted average of its manufacturing and services indexes, was 55.2, also higher than in June.