Breaking News

Aetna First-Quarter Operating Earnings $1.98 per Share, vs. Estimate for $1.55
Tweet TWEET

Service Industries in U.S. Probably Expanded at Fastest Pace in Six Months

Service industries in the U.S. probably grew in November at the fastest pace in six months, a sign the economy is accelerating in the final months of 2011, economists said before a report today.

The Institute for Supply Management’s index of non- manufacturing industries, which account for about 90 percent of the economy, rose to 53.8 last month from 52.9, according to the median projection of 67 economists surveyed by Bloomberg News. Factory orders fell in October, another report may show.

The services data may indicate the economic expansion is spreading at year-end after reports last week showed manufacturing picked up, consumer pessimism waned and unemployment dropped. At the same time, risks remain that Europe’s debt crisis and slower global growth will prompt U.S. companies to cut back.

“Things are improving and strengthening, and the recovery is broadening out,” said John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC in Boston. Still, “there are concerns over the euro area.”

The Tempe, Arizona-based group’s data is due at 10 a.m. Estimates in the Bloomberg survey ranged from 51.5 to 55. Fifty is the dividing line between expansion and contraction.

The figures follow a report last week from the Labor Department that showed the economy generated 120,000 jobs in November after 100,000 a month earlier. The unemployment rate unexpectedly dropped to 8.6 percent, the lowest since March 2009.

Stocks Rally

The labor market figures helped cap the biggest weekly rally in stocks since March 2009. The Standard & Poor’s 500 Index climbed 7.4 percent during the week, also helped by central bank actions to stem Europe’s debt crisis.

Signs the economy is picking up momentum are benefiting service providers. Transportation companies are joining retailers such as Kohl’s Corp. and Macy’s Inc. in boosting holiday hiring.

United Parcel Service Inc. (UPS) may add 55,000 holiday workers this year, a 10 percent increase from 2010, to help with shipping gains bolstered by online shopping, the company said Nov. 7. More than 120 million packages may be delivered in the week before Christmas, up 6 percent from last year, the world’s largest package-delivery company said in a statement.

Consumers poured into the malls and took to the Web during Thanksgiving weekend, spending a record $52.4 billion, the National Retail Federation said, citing a survey from BIGresearch.

Coach Bags

Coach Inc. (COH), the largest U.S. luxury handbag maker, expects an “excellent holiday season,” partly due to shoppers’ “strong interest” in accessories for self-purchase, Chief Executive Officer Lew Frankfort said on a conference call last week.

Limited Brands Inc. and Macy’s (M) posted November same- store sales that topped analysts’ estimates.

The ISM services survey covers industries ranging from utilities and retailing to health care and finance.

A Dec. 1 report by the same group showed manufacturing last month grew at the fastest pace in five months, boosted by gains in orders and production.

The Commerce Department will report today at 10 a.m. that factory orders in October fell 0.3 percent as demand for aircraft waned, according to the median projection in the Bloomberg survey. Bookings climbed 0.3 percent the prior month,

The Federal Reserve last week said the U.S. economy expanded at a “slow to moderate” pace in 11 of its 12 districts in October and the first half of November, led by gains in manufacturing and consumer spending. “Hiring was generally subdued” and residential real estate “generally remained sluggish,” the Fed said. “Consumer spending increased modestly, on balance.”

                    Bloomberg Survey

===========================================
                          ISM Non-  Factory
                              Manu   Orders
                             Index     MOM%
===========================================

Date of Release              12/05    12/05
Observation Period            Nov.     Oct.
-------------------------------------------
Median                        53.8    -0.3%
Average                       53.6    -0.3%
High Forecast                 55.0     0.8%
Low Forecast                  51.5    -1.1%
Number of Participants          67       53
Previous                      52.9     0.3%
-------------------------------------------
4CAST                         53.0     ---
ABN Amro                      53.0    -0.3%
Action Economics              53.5    -0.3%
Aletti Gestielle              53.5     ---
Ameriprise Financial          54.0    -0.2%
Banesto                       53.5     ---
Bantleon Bank AG              53.2     ---
Barclays Capital              53.5    -0.5%
Bayerische Landesbank         53.5    -0.2%
BMO Capital Markets           54.0    -0.3%
BNP Paribas                   54.0     ---
BofA Merrill Lynch            54.0    -0.5%
Briefing.com                  53.0    -0.6%
Capital Economics             54.0    -0.3%
CIBC World Markets            ---     -0.5%
Citi                          53.0    -0.6%
ClearView Economics           53.5    -0.2%
Comerica                      54.0    -1.0%
Commerzbank AG                54.0    -0.3%
Credit Agricole CIB           54.0    -0.4%
Credit Suisse                 54.0    -0.1%
Danske Bank                   53.3     ---
DekaBank                      54.0    -0.3%
Desjardins Group              54.0     0.0%
Deutsche Bank Securities      54.0     0.8%
Deutsche Postbank AG          54.0    -0.3%
DZ Bank                       53.5    -0.2%
Exane                         53.9     0.1%
First Trust Advisors          53.8    -0.2%
FTN Financial                 53.5     ---
Helaba                        53.0     0.0%
HSBC Markets                  54.5     ---
Hugh Johnson Advisors         53.5     ---
IDEAglobal                    54.0    -0.4%
Informa Global Markets        53.0     0.0%
ING Financial Markets         54.0     0.8%
Insight Economics             53.0    -0.2%
Intesa-SanPaulo               53.2     ---
Janney Montgomery Scott       52.5    -0.5%
Jefferies & Co.               53.3     ---
Landesbank Berlin             54.0    -0.1%
Landesbank BW                 54.0    -0.5%
Manulife Asset Management     54.0     0.2%
Maria Fiorini Ramirez         54.0     ---
Moody’s Analytics             53.9    -0.5%
Morgan Keegan & Co.           ---     -0.6%
Morgan Stanley & Co.          ---     -0.7%
Natixis                       53.0     ---
Nomura Securities             53.5    -0.3%
Nord/LB                       54.0    -0.4%
OSK Group/DMG                 54.0     ---
Parthenon Group               51.5    -0.7%
Pierpont Securities           53.5    -0.4%
PNC Bank                      54.5    -0.5%
Prestige Economics            52.5     ---
Raiffeisenbank International  ---     -0.8%
RBC Capital Markets           54.1     ---
Scotia Capital                54.0    -0.5%
SMBC Nikko Securities         55.0    -0.4%
Societe Generale              54.6    -1.1%
Standard Chartered            53.5     ---
State Street Global Markets   53.9    -0.4%
Stone & McCarthy Research     52.4     0.0%
TD Securities                 54.5    -0.5%
UBS                           54.5    -0.9%
Union Investment              53.5     ---
University of Maryland        54.0     0.0%
Wells Fargo & Co.             53.4    -0.2%
WestLB AG                     53.5    -0.4%
Westpac Banking Co.           53.0    -0.5%
Wrightson ICAP                53.5     0.2%
===========================================

To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.