Growth in the U.S. service sector accelerated slightly more than expected in the month of March, according to a report released by the Institute for Supply Management on Tuesday.
The ISM said its non-manufacturing index climbed to 54.5 in March from 53.4 in February, with a reading above 50 indicating growth in the service sector. Economists had expected the index to inch up to 54.0.
"According to the NMI, 12 non-manufacturing industries reported growth in March," said Anthony Nieves, chair of the ISM Non-Manufacturing Business Survey Committee.
He added, "The majority of respondents' comments indicate that business conditions are mostly positive and that the economy is stable and will continue on a course of slow, steady growth."
The bigger than expected increase by the headline index was partly due to a jump by the business activity index, which rose to 59.8 in March from 57.8 in February.
The new orders index also climbed to 56.7 in March from 55.5 in February, while the employment index inched up to 50.3 from 49.7.
On the inflation front, the prices index rose to 49.1 in March from 45.5 in February, although the reading below 50 indicates a continued drop in prices.
The ISM released a separate report last Friday showing that activity in the manufacturing sector expanded at a faster than expected rate in March.
The purchasing managers index climbed to 51.8 in March from 49.5 in February, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to inch up to 50.5.
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