Economic activity outside the manufacturing sector grew at an unexpectedly strong pace in November, marking the 20th consecutive month of expansion, according to a private research group.
The Institute for Supply Management’s non-manufacturing index, which measures mostly services, was 61.3 in November, up 1.5 points from the previous month.
It was the highest reading since July. It also beat the average analyst forecast of 59.0.
“November’s index indicates continued growth across most non-manufacturing industries,” with 34 percent of members reporting increases and only 9 percent seeing decreases, the ISM report said.
Index readings above 50 indicate expansion of activity and prices in the non-manufacturing sector, while readings under 50 denote contraction. The sector comprises about two-thirds of U.S. economic activity.
The component indexes also showed continued growth, but some showed that the pace was slowing somewhat.
The employment gauge dipped to 55.0 in November from 55.8 in the previous month, while prices paid, a gauge of inflationary pressures, fell back to 71.0 from 74.1.
The new orders index, meanwhile, inched lower to 59.9 from 60.5.
“Many of members’ comments regarding business in November indicate continued positive business conditions but with continued concern for inflationary pressures,” the ISM report said.
Also Friday, the Labor Department said nonfarm payrolls rose by just 112,000 in November, well below the 200,000 analyst forecast and shy of the 150,000-to-200,000 per month needed to absorb new entrants into the work force.
The mixed economic picture is puzzling economists who have been expecting the labor market to churn out more jobs for much of this year. Other indicators, such as jobless claims and the ISM employment indexes, have led them to believe that companies would hire new workers in greater numbers than have actually been reported in the monthly employment report.