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Washington • A private survey says growth accelerated in April at U.S. services companies, a potential positive for the economy after a sluggish start to 2016.
The Institute for Supply Management said Wednesday that its services index climbed to 55.7 in April, the highest level this year. The increase follows a reading of 54.5 in March. Any level above 50 signals growth.
New orders and employment measures all advanced last month, showing a stronger pace of expansion. The rate of business activity slipped in April, although that measure also pointed to continued gains.
The services index suggests that the economy might be improving slightly after an anemic opening to 2016. The U.S. economy expanded at an annual rate of just 0.5 percent during the first three months of the year, the government reported last week.
The pace of consumer spending slipped compared with the end of 2015, while business investment fell and the trade deficit subtracted from growth.
But steady job gains have prevented fears about the economy succumbing to the same level of financial turmoil that has recently gripped China, Japan, Brazil and parts of Europe. Employers have added 2.8 million jobs during the past 12 months, the hiring helping to provide a modest boost to household incomes that should support economic growth.
There are signs that manufacturing has become less of a drag on growth, after factory activity contracted due to falling oil prices and a stronger dollar making American-made goods so expensive that exports were hurt.
ISM said in a separate report this week that manufacturing expanded in April, the second straight monthly improvement. The manufacturing index registered at 50.8 in April and 51.8 in March, after activity had been declining in the prior five months.