U.S. private job growth slows, but services sector bullish
By Lucia Mutikani
WASHINGTON (Reuters) - U.S. companies hired workers at a steady clip in August and services sector activity accelerated to 6-1/2-year high, assurances the economy was on track for sturdy growth in the third quarter.
That view was reinforced by other data on Thursday showing only a slight increase in the number of Americans filing for unemployment benefits last week and a narrowing in the trade deficit to its lowest point in six months in July.
"The story line of underlying growth momentum at least being sustained and at best picking up this quarter has more or less been confirmed," said Millan Mulraine, deputy chief economist at TD Securities in New York.
Payrolls processing firm ADP said private-sector payrolls increased by 204,000 last month after rising by 212,000 in July, with gains spread across a range of industries.
While the report was a bit softer than economists expected, it marked the fifth straight month of gains above 200,000 and augured well for a broader report on hiring that the government will release on Friday.
In a separate report, the Institute for Supply Management said its services index rose to 59.6 last month, the highest reading since its inception in January 2008, from 58.7 in July.
A reading above 50 indicates expansion in the vast services sectors. A subindex of service industry jobs showed strong growth for the sixth straight month.
The government on Friday is expected to report that nonfarm payrolls increased by 225,000 last month after advancing by 209,000 in July, according to a Reuters survey of economists. Continued...