Service sector expands at fastest pace in a year

The nation's service sector grew at the fastest pace in a year last month on a pick up in business activity and new orders.

A index gauging the strength of the non-manufacturing sector showed that the industry's expansion increased to 56 up from 55.2, the Institute for Supply Management (ISM) reported on Tuesday.

That is the highest reading since February 2012 -- when the index measured 56.1.

Readings above 50 percent signal expansion and the service sector has been above that level for 38 straight months.

Business activity rose to 56.9 from 56.4, while new orders were up 58.2 from 54.4, according to the survey.

The index is a survey of a wide variety of businesses — the sector employs 90 percent of all workers, including those employed at restaurants, hotels and retailers.

Employers continued to hire, although at a slightly slower pace.

“The economy continues to slowly pick up, perhaps at an even faster pace than had been previously projected. New housing permits and business licenses are at a multiyear high, although still lower than pre-recession,” one survey respondent said.

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