The manufacturing sector has been on an impressive roll as of late, with well over 327,000 jobs added to the economy between July 2017 and 2018 and only a slight 3,000-position dip seen in August. The services segment is flying high as well, according to a newly released report.
"The services sector has grown for 103 straight months."
For the 103rd month in a row, the services sector grew, logging a reading of 58.5 percent on the Institute for Supply Management NMI Index. On a scale of 0 to 100, any number lower than 50 is indicative of contraction, with figures over the midpoint emblematic of expansion.
The ISM tracks 16 subsectors under the services umbrella, among them educational services, real estate and leasing, food services and accommodation, finance and insurance, as well as healthcare and social assistance.
An anonymous professional in the healthcare and social assistance sector told the ISM that the growth he or she has experienced is likely symptomatic of the U.S. economy as a whole, as numerous reports illustrate its string of successes.
"Our business continues to increase, perhaps linked to the general economy and aging Baby Boomers," the business owner explained.
Another unnamed business owner, in support services, attested to much of the same progress, noting business in August was better than what's been typical, especially in comparison to this time last year.
Tariffs leading to cost concerns
All that said, the latest development in the services industries haven't been 100 percent positive, at least not according to the professionals involved it. Due to the ongoing tariff issues with some of the U.S.' largest trading partners - China, in particular - many of the products business owners utilize are more expensive for them to buy.
"The global tariff war, [with] steel in particular, has driven the cost of goods higher," a business owner detailed, as quoted by The Wall Street Journal.
A respondent in the newspaper industry made mention of similar frustrations, noting that the price of pulp has risen, creating higher operating expenses both in the production of copy paper and newspaper.
"These dynamics have a significant impact on newspaper margins," the respondent hastened to mention.
Uptick in Employment, Business Activity Indices
Tariffs troubles aside, they aren't enough to deter professionals in the service industry from feeling optimistic about what lies ahead. Indeed, ISM's Business Activity Index outpaced the aforementioned indices, reaching 60.7 percent. The Employment Index also picked up the pace, climbing to 56.7 percent from a July reading of 56.1 percent.
Anthony Nieves, who heads the ISM survey of purchasing and supply managers, indicated that what's been apparent in the segment reflects what's happening with the economy overall.
"As we transpose the [ISM index] to what this would reflect annualized, it's a 3.5 percent GDP [growth rate]," Nieves told the Journal, "which is consistent with what most economists have been predicting as GDP growth."