US ISM Non-Manufacturing Composite Points Towards Expansion in Service Industry

Unexpectedly, U.S. service industries grew in July at a faster pace than in June. The ISM Non-Manufacturing Composite, an index which measures the rate of expansion or contraction in the service industry, expanded to 54.3 in July from 53.8 in June. According to Bloomberg, the median expectation was that the composite would fall to 53.0. Earlier in the morning, Challenger announced that job cuts fell by 57 percent to just over 41K, a sign of improvement in the labor market. Although the data levied little impact on the Greenback, improving job data coupled with expansionary signals in the service industry point towards potential improvement in the labor market moving forward. Investors will look for support for this sentiment on Friday, when US Nonfarm Payrolls are released.