LOS ANGELES (AP) â¿¿ Shares of staffing companies surged Tuesday after a report showed the U.S. service sector expanded in September for a ninth straight month.
The Institute for Supply Management reported its service-sector index increased last month to 53.2 from 51.5 in August.
The rate hit a high point of 55.4 in March, stayed there in April and May, and has fluctuated since. Readings above 50 signal growth.
The service sector is the nation's predominant employer. While the index increase was modest, it bodes well for staffing firms such as Kelly Services Inc. and SFN Group Inc., which could see a bump in business as companies look to add new employees.The news sent shares of Kelly Services up 74 cents, or 6.3 percent, to $12.52 in afternoon trading, while SFN shares added 37 cents, or 6.1 percent, to $6.49. Shares in Robert Half International Inc. rose 89 cents, or 3.5 percent, to $26.27. Barrett Business Services Inc.'s shares added 76 cents, or 5.2 percent, to $15.53. And Kforce Inc. shares rose 72 cents, or 5.5 percent, to $13.89. Weak consumer spending has kept the service industry, which employs about 83 percent of workers in the private sector, from gaining momentum after the recession ended. Economists say Tuesday's reading was better than expected â¿¿ but not enough to change their forecast for high unemployment and slow job growth for the rest of the year. An analysis by Credit Suisse economist Jill Brown of ISM's employment measure in September suggests the economy added about 90,000 jobs in the service sector last month.