The numbers: A barometer of business conditions at service-style companies such as hotels and hospitals held steady at a robust 55.1% in February, showing the U.S. economy is still in expansion mode. “Sales activity is generally strong despite economic headwinds,” a senior restaurant executive told the Institute for Supply Management, publisher of the report.
Numbers above 50% are a positive sign. The closely followed ISM reports are the first major indicators of each month to offer clues on how well the economy is performing. Economists polled by The Wall Street Journal had expected the index to drop to 54% from 55.2% in January. Key details: The snapshot of the economy provided by the service-sector index has held up better than a similar ISM survey of manufacturers that showed weaker business conditions. Service companies make up the bulk of all U.S. businesses, however, and employ the vast majority of Americans. The biggest negative: High inflation was still a sore spot. “Prices are still growing strongly,” said Anthony Nieves, chairman of the survey. Survey highlights:
The production gauge fell 4.1 points to 56.3%.
The new-orders index increased 2.2 points to 62.6% — the highest level in 13 months.
The employment barometer rose 4 points to a 14-month high of 54%.
The prices-paid index, a measure of inflation, slipped 2.2 points to 65.6%.
Yet companies said prices are still rising too fast, putting pressure on profits an …