US economy continues to deliver good news

| April 6, 2010 | 0 Comments
US economy continues to deliver good news

The world’s largest economy received a further boost today after the services sector posted better than expected growth in March.

The massive services sector, which makes up around two-thirds of US economic activity, grew at its fastest pace since May 2006.

According to analysts, the expansion within the sector suggests strong future growth in consumer spending and overall employment.

The Institute for Supply Management said its service index grew in March for a third consecutive month to 55.4 - rising from 53.0 in February.

Any reading above 50 indicates growth within the sector.

Joseph Brusuelas, chief economist at Brusuelas Analytics in Stamford, Connecticut, comments: “The service sector lags other areas of the economy and the March data provided another optimistic indication that the recovery is gaining traction.”

The news comes just a day after the Labor Department revealed the US economy added 162,000 jobs last month - the largest job gain since March 2007.

The unemployment rate remains at 9.7% - the third consecutive month it has been at this level.

The news sent oil prices soaring to an 18-month high of $85.89 a barrel and was the highest since the height of the financial crisis in autumn 2008.

The news also boosted hopes that the economic recovery is gathering steam.

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