Tempe, AZ, August 4--Service businesses, which account for the bulk of the economy, expanded at a faster pace in July, according to a private survey.
The Institute for Supply Management's index of financial services, construction, retail and other non-manufacturing enterprises rose to 64.8, from 59.9 in June. The index has been greater than 50, signaling expansion, since April 2003.
The economic expansion may be gaining strength after higher prices for energy and other goods crimped consumer spending last quarter, economists said. Gross domestic product grew at a 3 percent annual rate in the second quarter, after reaching 4.5 percent the first three months of the year, the Commerce Department said last week. Services account for about 85 percent of the economy.
``The service sector continues to move along at a healthy pace,'' William Natcher, an economist at National City Corp., said before the report. ``It's just been a part of our economy that's done remarkably well.''
Economists expected the institute's index to rise to 61.5, according to the median of 63 forecasts in a Bloomberg News survey. Estimates ranged from 57.9 to 64.7. The index reached a record 68.4 in April.
