Workers apply stucco to the exterior of a house under construction in the Pasadera community, a housing development of Hovnanian Enterprises Inc. in Rancho Cucamonga, California. Photographer: Patrick Fallon/Bloomberg
A gauge of services employment rose to a seven-month high, corroborating a report last week that showed a stronger labor market may provide more fuel for the economy. Macy’s Inc. (M)and Kohl’s Corp. (KSS) are among those that stand to benefit from more hiring at the same time homebuilders enjoy a rebound in demand that’s helping make up for a slowdown in manufacturing.
“We should see continued modest improvement in the economy,” said Yelena Shulyatyeva, U.S. economist at BNP Paribas in New York, who correctly forecast the October non- manufacturing figure. “If you’re expanding you have to have manpower. If you can’t do it with more hours worked, you have to hire.”
The Tempe, Arizona-based ISM’s services report is the last piece of economic data before tomorrow’s election, when voters decide between giving President Barack Obama another four years and changing course with Republican challenger Mitt Romney. Stocks gained following last week’s advance in the Standard & Poor’s 500 Index. The S&P 500climbed 0.2 percent to 1,417.26 at the close in New York. The yield on the benchmark 10-year Treasury note dropped to 1.68 percent from 1.72 percent late Nov. 2.
Economists’ Projections
Economists projected 54.5 for the non-manufacturing index, according to the median forecast in a Bloomberg survey. Estimates ranged from 53 to 57. The gauge averaged 53.8 in the third quarter. The group’s index of non-manufacturing employment climbed to 54.9, the highest since March, from 51.1 in the prior month. A measure of new orders decreased to 54.8 from 57.7. A gauge of business activity fell to 55.4 from 59.9. In the U.K., services growth cooled more than economists forecast in October, adding to signs of weakness in the economy at the start of the fourth quarter.
A gauge based on a survey of purchasing managers fell to a 22-month low of 50.6 from 52.2 in September, Markit Economics and the Chartered Institute of Purchasing and Supply said inLondon today. That’s below the lowest estimate of 51 in a survey of 30 economists by Bloomberg. The median forecast was 52.
China Services
China’s services industries rebounded from the slowest expansion in at least 19 months, adding to manufacturing gains that indicate the world’s second-biggest economy is recovering from a seven-quarter slowdown. The purchasing managers’ index rose to 55.5 in October from 53.7 the previous month, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in Beijing on Nov. 3. A separate services index released today by HSBC Holdings Plc and Markit Economics in Beijing fell to 53.5 in October from 54.3. ... Continue to read.
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