Service Sector Still Growing

Growth in the U.S. service sector accelerated in September but unemployment lines lengthened, according to reports Thursday that underscored an uneven and jobless recovery.

The Institute for Supply Management said its non-manufacturing index showed an eighth straight month of growth, rising to 53.9 in September from 50.9 in August. The index is above the 50 level that divides growth from contraction and soothed some concerns that the economy was headed back into recession.

Yet companies shed workers for the 19th straight month even as the service sector--which makes up about three-quarters of the economy--expanded. The ISM employment index fell to 46.6 in September, from 47.3 in August.

Job losses also caused new claims for unemployment benefits to rise to 417,000 last week, up from a revised 412,000. That was the sixth straight week above the 400,000 level, which usually is associated with a rise in the unemployment rate, currently at 5.7%.

The four-week moving average of jobless claims--seen as a more accurate measure because it smoothes out week-to-week fluctuations--rose for the eighth straight week to 423,000 in the week ended Sept. 28, its highest level since May, the Commerce Department said.

Another report released Thursday showed caution in America’s boardrooms. The Conference Board said its barometer of chief executive confidence fell sharply in the third quarter to 54, from 61 in the second quarter.

Separately, the government said factory orders were unchanged in August as strong demand for transportation equipment offset declines in other sectors. Factory orders were flat at $326.6 billion, the Commerce Department said.