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Business Title: Service Industries in U.S. Grow for Fifth Straight Month, ISM Index Shows June 3 (Bloomberg) -- Service industries in the U.S. expanded in May for a fifth straight month, showing the recovery is broadening and generating jobs. The Institute for Supply Management’s index of non- manufacturing businesses, which makes up almost 90 percent of the economy, held at 55.4 for a third month. Readings above 50 signal expansion. The group’s employment gauge climbed to the highest level since the recession began in December 2007. Companies increased staffs by almost half a million workers through April, leading to gains in incomes and spending that will help sustain the economic rebound after government support wanes. Target Corp. and Dow Chemical Co. are among those seeing a pickup in sales that indicates confidence is growing even as the European debt crisis roils financial markets. “Services remain in rebound,” Maxwell Clarke, chief U.S. economist at IDEAglobal Inc. in New York, said before the report. “Now that you’ve got the ball rolling for services, it’s going to take a lot more than a hiccup of concerns to derail it.” Economists forecast the index would rise to 55.6, according to the median of 76 projections in a Bloomberg News survey. Estimates ranged from 53.9 to 57. The number of Americans seeking jobless benefits last week fell to 453,000, a level that signals firings remain elevated even as the economy expands, according to figures from the Labor Department today. Data from ADP Employer Services showed companies added 55,000 workers to payrolls in May, the fourth consecutive increase. Employment Improves The ISM non-manufacturing employment gauge climbed to 50.4 in May from 49.5 the prior month. The measure of new orders fell to 57.1 from 58.2. Business activity climbed to 61.1, the highest level in four years, from 60.3 the prior month. The ISM index of prices paid dropped to 60.6 from 64.7. Categories in the ISM services survey include utilities, health care, housing, transportation and finance and insurance. Private employment has grown by 483,000 workers in the first four months of the year, according to figures from the Labor Department. Wages and salaries advanced 1.4 percent over the period, the best four-month gain in two years. Figures from the supply managers’ group on June 1 showed manufacturing grew in May at a faster pace than forecast as factories added workers, sales overseas rose at the fastest pace in two decades and U.S. orders also climbed. Don’t ‘Panic’ Midland, Michigan-based Dow, the world’s second-largest chemical maker, yesterday said financial markets shouldn’t panic over the European debt crisis or concern growth in China will slow because its sales show consumer demand is improving in both regions. “We are seeing good momentum and the momentum is continuing in the second quarter,” Dow’s Chief Executive Officer Andrew Liveris said in a webcast from New York. U.S. consumer spending is rising on everything from appliances and cars to electronics, he said. Other areas are now also seeing improvement. Target, the second-largest U.S. discount retailer, last month said it posted first-quarter earnings that beat analysts’ projections. Chief Executive Officer Gregg Steinhafel cited a better-than-expected economic environment that boosted sales of profitable items such as clothes. Concern over Europe’s sovereign-debt crisis, heightened tensions on the Korean peninsula and Middle East, and the oil spill in the Gulf of Mexico have combined to hurt shares. The Standard & Poor’s 500 Index has dropped almost 10 percent since reaching a 19-month high on April 23.
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