US service sector grows strongly

The services sector grew strongly in March

The US service sector grew at an unexpectedly fast pace in March, according to the Institute for Supply Management's latest monthly report.

Its closely watched services index rose to 60.5 in March from 60.1 in February, surprising analysts who had expected a slight slowdown to 59.

The rise was put down to an increase in new orders and a small dip in prices.

Any change to the service sector is closely watched in the US as it accounts for 80% of the total economy.

Wide sector

The sector includes businesses such as restaurants, hotels, bars, hair salons, banks and airlines.

"The market was looking for confirmation that there might be a broad slowing of the economy under way, but the data did not reinforce that view," said Tony Crescenzi, chief bond market strategist at Miller Tabak & Co.

"In fact, it suggested the slowdown seen in manufacturing was isolated to that sector alone."

Any figure above 50 in the services index indicates that the sector is growing.