ISM Services Index Improves

The U.S. economy’s service sector improved in January for the first time in three months, the Institute for Supply Management said Wednesday.

ISM’s monthly services index rose to a 50.5 reading, the highest since May 2008, from 49.8 in December, ISM said in its monthly report.

Figures of more than 50 indicate expansion, while below that shows contraction. Economists had forecast an increase to a 51 reading, Bloomberg reported.

The new orders index, an indicator of future activity, climbed to 54.7, the highest since October 2007, from 52 in December.

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.