United State Service Sector Growth Unexpectedly Accelerated again in January

The ISM non-manufacturing index indicated that the sector expanded for
the fourteenth consecutive month in January and the pace of growth
unexpectedly accelerated, as the index rose to 59.4 from 57.1 in the
previous month, its highest level since August 2005 (a reading above
50 indicates the sector is generally expanding). Market expectations
were for a flat reading of 57.1. The employment sub-index more than
retraced the previous month's decline to rise to its highest level
since May 2006 at 54.5.

The surprise increase in the ISM non-manufacturing index was broadly
based and brought the measure to its highest level in more than five
years. Business activity expanded for the eighteenth month in a row,
and the sub-index rose to its highest level since December 2004,
increasing to 64.9 from 62.9 last month. The pace of growth in new
orders selected up as well, rising to 64.9 from 61.4 in the previous
month, in place of its highest level since January 2004. The
employment sub-index went more firmly into expansionary territory,
rising to 54.5 in January from 52.6 in December. With respect to
inflationary pressures, growth in prices paid by non-manufacturing
firms accelerated to 72.1 from 69.5 in December, the highest level of
the sub-index since September 2008.

When combined with Tuesday's better than expected manufacturing
report, today's ISM non-manufacturing report suggests that the U.S.
economy has carried the positive momentum established in the latter
part of 2010 into the new year, and we anticipate that the pace of
growth will accelerate during 2011. On the jobs front, the sub-indices
for both of January's ISM reports posted strong increases in the
month, which is consistent with our view that employment growth
accelerated in January, with private payrolls posting an expected
141,000 gain following the increase of 113,000 in December. These
gains, but, are not expected to place significant downward difficulty
on the unemployment rate in the near term, and given the Fed's view
that progress toward the mandate of full employment has been "poorly
slow", we continue to expect the Fed funds rate to remain on hold
throughout 2011.

Source: ActionForex.Com