Service sector grows for 11th month in a row

The U.S. services sector continued to expand in November, marking an 11th straight month of growth, according to a closely watched survey.

The Institute for Supply Management said Friday that its nonmanufacturing index increased to 55% from 54.3% in October, in line with predictions by economists surveyed by MarketWatch.

Readings above 50% indicate that business at more firms is expanding rather than contracting. The index had been above 50% since December 2009.

“Respondents’ comments mostly reflect cautious optimism,” said Anthony Nieves, chairman of the ISM nonmanufacturing index.

In the latest survey, 10 of the service industries tracked by ISM reported growth, while six reported contraction.

The ISM employment measure rose 1.8 percentage points to 52.7% in November. The employment index has hovered around the 50% mark for the last six months.

The new-orders index climbed 1 percentage point to 57.7%, but the business-activity index fell to 57% from 58.4%.

The prices-paid index dropped 5.1 percentage points but was still relatively high at 63.2%.

Inventories grew in November for the first time in three months as companies prepared for holiday sales. The inventories index rose to 51.5% from 47.5% in October.

The export index rose 4 percentage points to 59.5%, while the import index edged up to 54.5% from 54%.

Bartash writes for MarketWatch.com/McClatchy.