Firmer business activity and orders helped lift a gauge of U.S. service providers to a five-month high in January, indicating steady growth in the broader economy at risk of wavering amid mounting concerns about the coronavirus.
The Institute for Supply Management's non-manufacturing index climbed to 55.5, exceeding the median projection in a Bloomberg survey of economists, from 54.9 a month earlier, according to data issued Wednesday. A measure of business activity climbed to an almost one-year high. The subindex, which parallels the group’s index of factory production, has jumped 8.6 points in the last two months, the biggest gain in 11 years.
The improvement in services activity and a rebound in the ISM's manufacturing gauge show business optimism was building just as the coronavirus epidemic began to exact a bigger toll -- both in terms of the growing number of lives lost and economic disruption.
While Chinese health officials are racing to contain the outbreak that has claimed hundreds of lives and infected tens of thousands, the virus has forced the closure of businesses in China, reduced air traffic and affected U.S. supply chains.
The ISM's measure of new orders at U.S. service providers increased to 56.2 in January from a three-month low. Other details from the report were less upbeat. Measures of employment, order backlogs and exports all softened from the end of 2019.
Elsewhere, a gauge of service industries activity from IHS Markit rose to a 10-month high of 53.4 in January from 52.8, according to a separate report Wednesday.
This article was provided by Bloomberg News.