The nation’s service economy expanded at a faster-than-expected clip in June, a research group said Thursday, suggesting soaring gas prices and inflation aren’t dampening strength in industries such as banking, retail and travel.
The Institute for Supply Management, based in Tempe, Ariz., said its index of business activity in the non-manufacturing sector registered 60.7. The reading was higher than May’s reading of 59.7 and Wall Street’s expectation of 58.1.
It was the highest reading since April 2006, when it registered 61.1.
A reading above 50 indicates expansion, while one below indicates contraction.
The service industries covered by the ISM report represent about 80 percent of economic activity and span diverse industries including banking, construction, retailing, mining, agriculture and travel. All 14 industries surveyed by ISM reported growth, while none reported decreased business activity compared with May.
The prices paid index also expanded, but at a more moderate pace than in the previous month. The index fell to 65.5 in June from 66.4 in May.
The report offered the latest evidence that the economy may be picking up after a recent slowdown.
On Monday, the ISM reported new orders and production powered the manufacturing sector in June, with growth expanding at its fastest pace in at least a year.