Service industries in the U.S. accelerated in February more than anticipated, indicating the economic expansion may soon create jobs following the worst employment slump in the post-World War II era.
The Institute for Supply Management’s index of non- manufacturing businesses, which covers almost 90 percent of the economy, increased to 53 from 50.5 in January. Last month’s reading was the highest since October 2007 and exceeded all estimates of 73 economists surveyed by Bloomberg News.
The factory rebound that helped the economy emerge from the recession is starting to filter to other industries, giving a boost to companies such as Macy’s Inc. Stocks climbed as another report showed job losses cooled in February and pointed to gains in employment as soon as this month.
“We’re starting to see a broadening of the economic recovery,” said Richard DeKaser, chief economist at Woodley Park Research in Washington, whose forecast of 52.9 was the highest in the Bloomberg survey. The data “are encouraging, to say the least.”
The Standard & Poor’s 500 Index rose 0.4 percent to 1,123.14 at 12:13 p.m. in New York. The 10-year Treasury note fell, pushing the yield up to 3.64 percent from 3.61 percent late yesterday.