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U.S. Service Sector Growth Unexpectedly Accelerates In November

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Growth in U.S. service sector activity unexpectedly accelerated in the month of November, according to a report released by the Institute for Supply Management on Thursday.

The ISM said its non-manufacturing index crept up to 60.7 in November after pulling back to 60.3 in October, with a reading above 50 indicating service sector growth. Economists had expected the index to dip to 59.2.

"The non-manufacturing sector continued to reflect strong growth in November," said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.

"However, concerns persist about employment resources and the impact of tariffs," he added. "Respondents remain positive about current business conditions and the direction of the economy."

The unexpected uptick by the headline index was partly due to a notable acceleration in the pace of growth in business activity, as the business activity index jumped to 65.2 in November from 62.5 in October.

The new orders indeed also rose to 62.5 in November from 61.5 in October, indicating a faster rate of growth in new orders.

On the other hand, the employment index fell to 58.4 in November from 59.7 in October, suggesting a slowdown in the pace of job growth in the service sector.

The report also said the prices index surged up to 64.3 in November from 61.7 in October, pointing to a re-acceleration in the pace of price growth after a slowdown in the previous month.

The ISM released a separate report on Monday showing manufacturing activity in the U.S. unexpectedly grew at a faster rate in November.

The purchasing managers index climbed to 59.3 in November after falling to 57.7 in October, while economists had expected the index to edge down to 57.5.

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