US service sector sees relief as virus-hit economy rebounds

US service sector sees relief as virus-hit economy rebounds

NEW YORK: After a year of layoffs and uncertainty, data released showed the US service sector adding jobs and expanding in April, as the world’s largest economy bounces back from the worst of the COVID-19 pandemic. Payroll services firm ADP reported the private sector added 742,000 jobs last month, the overwhelming majority of which were in the services sector and in particular leisure and hospitality, one of the industries’ worst-affected by business restrictions meant to stop the virus.

The Institute for Supply Management (ISM) said its index of service sector activity was at 62.7 percent in April, well into expansionary territory but slightly lower than the month before as firms navigated supply chains that had grown overwhelmed by demand as major economies reopen.

The data bodes well for the United States, which is expected to see rapid growth this year as Covid-19 vaccinations allow businesses to return to normal after the pandemic caused widespread layoffs and business closures in 2020. “The labor market is recovering and job growth is set to accelerate over coming months as the economy continues to move closer to a broader reopening,” Rubeela Farooqi of High Frequency Economics said of the ADP data.

There were, however, signs of weakness