NEW YORK - Growth in the U.S. service sector accelerated in February to its fastest pace in more than two years, but jobs remained hard to find.
Gains in the economy so far have been led by a rebound in manufacturing, as companies slowed their inventory drawdowns and exports rose.
The service sector, which accounts for the vast majority of U.S. jobs, has seen much slower, bumpier improvement as layoffs and tight credit weigh on consumers. Its health is crucial to a sustained recovery from the deep recession that began in December, 2007.
The Institute for Supply Management said yesterday its index measuring service industry activity rose to 53 in February from 50.5 in January. Economists polled by Thomson Reuters expected a smaller increase to 51. Any level above 50 signals growth. The 53 reading is the highest since January, 2008.
Meanwhile, ISM's measure of employment improved to 48.6, the highest level since April. That's the 26th consecutive month of shrinking jobs, but it is approaching the level where firms may begin hiring. Outplacement firm Challenger, Gray & Christmas said companies announced 42,000 layoffs in February, the smallest monthly jobs loss since June, 2006.