US services sector gained in July

Activity in the US economy's crucial services sector grew solidly in July on a jump in business activity and new orders, the Institute for Supply Management reported on Monday. The ISM said its purchasing managers index for services rose to 56 percent in July, 3.8 points higher than the level in June and besting the 53.2 average forecast by analysts. A reading above 50 indicates growth and one below 50 shows contraction. The report showed especially strong improvement in business activity, with 12 of 16 sectors reporting increases. The sub-index for business activity rose 8.7 percent points from June to 60.4 percent. The improvement "indicates continued growth at a faster rate in the non-manufacturing sector," said Anthony Nieves, chair of the survey committee. "Respondents' comments are mostly positive about business conditions and the overall economy." New orders surged, the index jumping to 57.7, up from 50.8 percent in June. Prices also picked up, the index rising 7.6 points to 60.1. But non-manufacturing employment growth slowed, with the index falling to 53.2 in July from 54.7 in June.