{UAH} THE AMERICAN ECONOMY IS ON STEROIDS ->PART FOUR

Most U.S. companies grow at sizzling pace in August despite tariffs, ISM survey finds

By Jeffry Bartash

Published: Sept 16, 2018 11:08 a.m. ET

Evidence shows economy still going strong as fall approaches

Bloomberg News/Landov

Pour a drink for the fast-growing U.S. economy.

The numbers: A survey of service-oriented companies in the U.S. such as hospitals, retailers and restaurants show rapid growth in August, underscoring the broad strength in the economy.

The Institute for Supply Management said its non-manufacturing index climbed to 58.5% in August from 55.7% in the prior month, bringing it back again near a postrecession high.

Numbers over 50% are viewed as positive for the economy, and anything over 55% is considered exceptional.

What happened: New orders, production and employment all increase in August. All but one of the 17 industries tracked by ISM reported stronger business last month.

Big picture: Many executives complain U.S. tariffs or the threat of tariffs have led to higher prices for raw materials. They also say finding suitably skilled workers is another growing problem.

All in all, though, most companies are growing rapidly and managing those problems well enough to keep business growing strong. The U.S. economy itself is also expanding rapidly and could post its fastest growth in 2018 in 13 years.

What they are saying?: “Based on current trends on customer quote requests and conversions to orders, we are trending for this month to be the best August in the history of our company,” said an executive at a company that offers professional management and support services.

“Tariff-related cost increases are beginning to accelerate, whether tariffs have been put into effect or not,” a senior executives at a construction company said. Wood prices in particular have risen.

What they are saying?: The ISM report was “quite strong, despite ongoing concerns about trade policy,” said chief U.S. economist Jim O’Sullivan of High Frequency Economics.

DJIA, +0.44% Market reaction: The Dow Jones Industrial Average DJIA, +0.44% and the S&P 500 SPX, +0.37% retreated in Thursday trades after opening gains. The stock market has fallen this week amid tense negotiations between Canada and the Trump administration on a revamped NAFTA free-trade deal.

EM         -> { Trump for 2020 }

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