WASHINGTON (AP) - The U.S. service sector expanded in February at the fastest pace in more than five years and firms hired at the quickest rate since before the recession.
The report from the Institute for Supply Management offered the latest sign that job growth could accelerate this year.
The trade group's service-sector index, which covers about 90 percent of the work force, rose to 59.7 last month, from 59.4 in January. That's the sixth straight monthly increase and the highest reading since August 2005. Any reading above 50 indicates expansion.
The service sector is broadly defined by the trade group, covering a range of industries from retail to health care to financial services. The index plummeted to 37.6 in November 2008, at the height of the financial crisis.
Hiring by service-sector companies rose to the highest level since April 2006, a separate index in the report noted.
The report is "yet another indicator corrobating the idea that ... current and future production levels necessitate the hiring of additional employees," said Dan Greenhaus, chief economic strategist at Miller Tabak.
Unemployment aid requests fall to near 3-year low
The number of people requesting unemployment benefits last week plunged to a nearly three-year low, bolstering the likelihood that companies will increase the pace of hiring this year.
Applications for unemployment benefits fell by 20,000 to a seasonally adjusted 368,000, the Labor Department said Thursday. It was the third decline in the past four weeks. Applications are now at their lowest level since May 2008.
The four-week average for applications, a less volatile figure, fell last week to 388,500. That's the lowest level since July 2008, the last time the four-week average was below 400,000.
Applications that remain consistently below 375,000 tend to signal steady declines in the unemployment rate. Unemployment benefit applications peaked during the recession at 651,000.
House votes to end unpopular new business tax rule
An unpopular tax filing requirement for businesses tucked into the new health care law would be repealed under a bill overwhelmingly passed by the House Thursday.
The provision would require millions of businesses to file tax forms for every vendor that sells them more than $600 in goods each year, starting in 2012. The requirement is projected to raise nearly $25 billion over the next decade by ensuring that vendors pay their taxes. But lawmakers in both parties say it could create a paperwork nightmare for businesses and the Internal Revenue Service.
The filing requirement is so unpopular in Congress that it is unlikely to ever take effect. The House voted 314 to 112 Thursday to repeal the filing requirement, with 76 Democrats joining all Republicans in voting to pass the bill. The Senate passed a similar measure last month, and attached it to an unrelated bill to help modernize the nation's air traffic control system.