The US service economy rebounded faster than forecast in April, a sign the economy had regained momentum at the start of the second quarter following an abrupt slowdown at the start of the year.
The Institute for Supply Management’s non-manufacturing PMI rose to 57.8 in April from 56.5 in March. Economists forecast a slight decrease to 56.2.
The US service economy has been above the 50 mark that separates expansion from contraction for 63 consecutive months.
Fourteen non-manufacturing industries reported growth in April, as overall employment increased for the fourteenth consecutive month.
“Definite signs of economic growth in most markets serviced. New construction and capital spending apparent,” said one manager from the finance and insurance sector.
“Overall we see positive trends; spending has improved,” said another respondent from retail trade.
Added a representative from transportation and warehousing, “Low fuel prices continue to have a positive impact.”
Business activity improved across the board last month, as new orders and production levels increased at a faster rate.
Last week ISM said manufacturing activity remained steady in April, as new orders and production levels remained elevated. The latest PMI figures indicate that the US economy was recovering at the start of the second quarter after hitting a soft patch in the first three months of the year. US gross domestic product expanded just 0.2 percent annually in the first quarter, following a 2.2 percent gain in the previous quarter.