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Service industry numbers indicate economic recovery is picking up

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Service companies in the United States expanded at a faster pace in September than had been projected, indicating that the economic recovery is picking up, Bloomberg reported.

The Institute for Supply Management’s (ISM) index of non-manufacturing businesses, which covers about 90 percent of the economy, rose to 53.2 from 51.5 in August. The gauge, where readings greater than 50 signal growth, averaged 55.3 during the six-year expansion that ended in December 2007.

Faster services growth would help boost the economy at a time when factory expansion, which helped lead the recovery, is cooling. Even so, with an unemployment rate projected to average above 9 percent through 2011, retailers may find it hard to increase sales, and home buying could languish.

The median forecast of 76 economists surveyed by Bloomberg News projected that the ISM index would rise to 52. Estimates ranged from 50 to 53.3.

The services survey covers industries that range from utilities and retailing to health care, housing, finance and transportation. The group’s factory survey, released Oct. 1, showed manufacturing expanded last month at the slowest pace since November as orders and production cooled.