Washington: U.S. services sector activity picked up in August as strong demand lifted new orders to a 3-1/2-year high and drove input prices higher, suggesting inflation could remain elevated and compel the Federal Reserve to hike interest rates before the end of this year.
The Institute for Supply Management said on Thursday its nonmanufacturing Purchasing Managers' Index advanced to 55.4 last month from 54.1 in July. A reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of U.S. economic activity. Economists polled by Reuters had forecast the PMI would climb to 54.2. The current PMI level is consistent with solid economic growth in the third quarter.
