The Institute for Supply Management (ISM) has released its non-manufacturing report for July. The index rose to 58.7%, from 56% in June. This marks the highest reading in years and represents continued growth in the services sector.

The Non-Manufacturing Business Activity Index increased to 62.4% from the June reading at 57.5%. In turn, that marks growth for the 60th consecutive month. February 2011 marked the last time the index had reached such levels at 63.3%.

The New Orders Index registered 64.9% from 61.2% in June. This represents the highest reading for that index since August 2005, when it registered 65.3%.

The Employment Index increased to 56% from the June reading of 54.4%, and indicates growth for the fifth consecutive month.

Inflation may not be an issue here. It turns out that the Prices Index decreased from the June reading of 61.2% to 60.9%, indicating prices increased at a slightly slower rate in July when compared to June.

According to the ISM report, stabilization and improving market conditions positively contributed to 16 non-manufacturing industries reporting growth in July. Industries reporting growth were as follows: Construction; Educational Services; Public Administration; Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Retail Trade; Accommodation & Food Services; Professional, Scientific & Technical Services; Management of Companies & Support Services; Finance & Insurance; Mining; Wholesale Trade; Health Care & Social Assistance; Transportation & Warehousing; Information; and Other Services. The ISM reported that the only industry reporting contraction in July was the Utilities sector.

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