A gauge of the US service sector returned to growth last month, aided by the holiday season’s retail sales. The expansion reflected a slowly improving economy — but it was too slight to generate much hiring.
The Institute for Supply Management (ISM), a private trade group, said on Wednesday its service index rose to 50.1 last month from 48.7 in November. A level above 50 signals growth. Seven industries out of 18 reported growth, led by agriculture and retail.
The ISM’s employment gauge, which hasn’t grown in two years, shrank again last month, though at a slower pace than in November. It reached 44 last month, compared with 41.6 a month earlier.
Job generation throughout the economy has been weak even as layoffs have slowed. Economists expect the US Labor Department to report today that the unemployment rate ticked up to 10.1 percent last month from 10 percent in November and that the economy lost a net total of 8,000 jobs.
The ISM said the four service-sector groups that added jobs last month were retail, finance and insurance, public administration and a category of other services. Retailers added temporary workers, as they normally do for holiday shopping seasons.
The overall service-sector gauge returned to growth in September for the first time in 13 months, but the comeback has been fitful amid scant gains in consumers’ incomes and weak bank lending. The ISM’s service-sector gauge is closely watched because service jobs make up more than 80 percent of non-farm US employment.
“We don’t think the increase was all that convincing,” said Millan Mulraine of TD Securities because growth in new orders slowed and employment still signaled contraction.
The Labor Department reported last month that the service sector added jobs in November, even though that wasn’t reflected in the ISM survey.
The service sector is so large that the ISM survey may not be effective in calculating changes in employment, said Mulraine, who forecast that jobs may have posted a net increase of 25,000 last month.
The ISM report said finance and accounting was another area that added jobs.
EFinancialCareers.com, a jobs site aimed at finance professionals, said postings for jobs involving derivatives grew 19 percent last month compared with last year. Work involving debt, fixed income and accounting were also hot areas.
“Companies have let go of too many people in certain parts of their business,” eFinancial CEO John Benson said.
As confidence increases in financial markets, they’re looking to rebuild, he said, especially in profitable areas.
The ISM report said new orders, a signal of future business, expanded for the fourth straight month, though less quickly than in November. Business activity also grew, as did the prices paid by businesses. That may mean service companies will pass their higher costs on to consumers, collecting higher revenue.
More spending by US consumers would translate into higher sales for the nation’s service providers, and eventually, should mean more jobs.
“Retail might very well be the shot in the arm,” Capital Economics’ Paul Ashworth said.
The ADP National Employment Report said on Wednesday that 84,000 private-sector jobs were lost last month, an improvement from November.
ADP said private nonfarm employment in the service sector grew by 12,000 jobs, while manufacturing lost 43,000 jobs.
‘NO EQUILIBRIUM’: Taiwan’s increased defense spending is a good step, but it needs to do more to have the ability to deter aggression from China, a senior US official said The US plans to sell as many as seven major weapons systems — including mines, cruise missiles and drones — to Taiwan, four people familiar with the discussions said. Pursuing seven sales at once is a rare departure from years of precedent in which US military sales to Taiwan were spaced out and carefully calibrated to minimize tensions with Beijing. However, US President Donald Trump’s administration has this year become more aggressive with China, and the sales would land as relations between Beijing and Washington are at their lowest point in decades over accusations of spying, lingering trade tensions, disputes about the
CLOSE ENCOUNTERS: Several of the PLA fighter jets that crossed the median line of the Strait came within 68km of Hsinchu, drawing warnings from Taiwan, the ministry said At least 18 Chinese military aircraft yesterday flew into the nation’s air defense identification zone (ADIZ) on the second day of a US delegation’s visit, the Ministry of National Defense said, adding that the military responded by deploying an air defense missile system to monitor their activities. A delegation led by US Undersecretary of State for Economic Growth, Energy and the Environment Keith Krach on Thursday started a three-day visit to Taiwan. The ministry from Thursday started publicizing the actions of the Chinese People’s Liberation Army (PLA) in Taiwan’s ADIZ on its Web site and Twitter. According to ministry reports, 18 PLA aircraft
WORKING OVERTIME? NTU professor Lee Duu-jong denied that he had held a part-time position at a Chinese university or joined China’s Thousand Talents Program A candidate for the post of National Taiwan University of Science and Technology (NTUST) president yesterday dropped out of the race following a report questioning his links to Chinese academia and government programs. Lee Duu-jong (李篤中), a professor at National Taiwan University’s (NTU) chemical engineering department, was a member of China’s Changjiang Scholars’ Program in 2006 and was on the list of its Thousand Talents Program in 2017, a report by Chinese-language Mirror Media magazine said yesterday. The article said that Lee is suspected of having held a part-time job at the Harbin Institute of Technology in China and was the recipient
A Taiwanese bird protection group yesterday said that it has been kicked out of BirdLife International — a global conservation partnership — after it refused to sign a statement saying it would never advocate independence. The Taipei-based Chinese Wild Bird Federation said that BirdLife International last week voted to remove it, ending a partnership that had been in place since 1996. Over the past 20 years, the federation has changed its English name three times to satisfy BirdLife International, and recently the international group demanded that it change its Chinese name and sign a statement that it is “formally committing to not