Surprising economists, U.S. services sector grew in August  Though U.S. manufacturers experienced lower demand and output in August, analysts greeted the latest report on the U.S. services sector with cheers.

According to the Institute for Supply Management, the U.S. services sector, which accounts for a vast majority of the country's economic activity, grew at a slightly faster pace in August than in the month prior. MarketWatch reports that although the expansion varied among businesses, U.S. consumer spending picked up.

The August ISM report stated the service index, a broad measure of overall activity, climbed to 53.5 percent in August, representing an uptick from the 52.7 percent figure logged in July. Economists had largely projected the index to fall.

A reading of more than 50 percent generally indicates the sector is expanding, according to ISM officials, and August's numbers fueled a collective sigh of relief among government officials, who have grown increasingly concerned the U.S. is dipping into another recession, experts said.

Nevertheless, industry analysts were split in their forecasts for the sector's future prospects, citing the bleak domestic jobs picture, as well as tepid economic growth.
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