Economic activity in the US nonmanufacturing sector accelerated in January, according to the Institute for Supply Management’s nonmanufacturing index, released today. Reuters reported the index was the highest it has been in more than 12 years.

ISM’s nonmanufacturing index rose in January to a reading of 59.9% from December’s reading of 56.0%. Readings above 50% generally indicate improving conditions.

“The nonmanufacturing sector reflected strong growth in January after two consecutive months of pullback,” said Anthony Nieves, chair of the ISM's Nonmanufacturing Business Survey Committee. “Overall, the majority of respondents’ comments are positive about business conditions and the economy. They also indicated that recent tax changes have had a positive impact on their respective businesses.”

The employment portion of the index increased 5.3 percentage points in January to 61% from the seasonally adjusted December reading of 56.3%.