ISM Services Index Expands in November

The U.S. economy’s service sector expanded in December at the fastest pace in four and half years, the Institute for Supply Management said Wednesday.

ISM’s monthly services index rose to a reading of 57.1 — the highest since May 2006 — from 55 in November, ISM said in its monthly report. Figures greater than 50 indicate expansion.

Economists had forecast a reading of 55.7, Bloomberg reported. The index averaged 56.1 during the five-year expansion that ended in December 2007.

ISM’s services index measures non-manufacturing components of the economy, and the services sector, which includes transportation, retail sales and financial services, accounts for nearly two-thirds of the U.S. gross domestic product.