Service-sector firms grow amid higher sales

WASHINGTON – U.S. service companies grew in February at the fastest pace in a year, buoyed by higher sales, more new orders and solid job growth. The gain suggests higher taxes have yet to slow consumer spending on services.

The Institute for Supply Management said Tuesday that its index of nonmanufacturing activity rose to 56 in February from 55.2 in January. Any reading above 50 indicates expansion.

The report measures growth in industries that cover 90 percent of the workforce, including retail, construction, health care and financial services. A solid recovery in the housing market helped drive the index higher.

Service firms also kept adding jobs last month. A measure of service-sector hiring fell only slightly after reaching a nearly seven-year high in January.

U.S. home prices take healthy jump in January

WASHINGTON – U.S. home prices jumped in January, a sign the housing market is gaining momentum as it nears the spring selling season.

Home prices rose 9.7 percent in January from a year ago, according to data released Tuesday by CoreLogic. That’s up from an 8.3 percent increase in December and the biggest annual gain since April 2006. Prices rose in all states except Delaware and Illinois. And prices increased in 92 of the 100 largest metro areas, up from 87 in December.

Home prices also rose 0.7 percent in January from December. That’s a solid increase given that sales usually slow over the winter.

Rising demand combined with fewer available homes is pushing up prices. Sales of previously owned homes ticked up in January after rising to their highest level in five years in 2012, according to the National Association of Realtors. At the same time, inventories of homes for sale fell to a 13-year low.