The numbers: Restaurants and other service-oriented companies grew more rapidly in October as coronavirus cases fell sharply nationwide, even as they were hampered by persistent shortages of labor and supplies.
An index based on a survey of senior business executives jumped to a record 66.7% from 61.9% in September, the Institute for Supply Management said Wednesday. Any reading above 50% signals expansion and numbers above 60% are exceptional.
The increase was much bigger than Wall Street expected. Economists polled by The Wall Street Journal had forecast the index to total 62%.
Big picture: Falling coronavirus cases tied to the highly contagious delta variant has given Americans the confidence to go outside again and spend more freely at restaurants, hotels, airports and the like. That’s given a boost to the service side of the U.S. economy that employs the vast majority of Americans.
The biggest worries now are shortages of both workers and supplies. Companies can’t find enough people to hire or get enough materials to produce as many goods and services as they’d be able to sell.
The shortages have spawned the biggest surge in inflation in 30 years and threatens to slow the U.S. recovery, especially if prices continue to grow faster than wages.