The Institute for Supply Management's index of financial services, construction, retail and other non-manufacturing enterprises rose to 64.8, from 59.9 in June. The index has been greater than 50, signaling expansion, since April 2003.

The economic expansion may be gaining strength after higher prices for energy and other goods crimped consumer spending last quarter, economists said.

...

Economists expected the Tempe, Arizona, institute's index to rise to 61.5, according to the median of 63 forecasts in a Bloomberg News survey. Estimates ranged from 57.9 to 64.7. The index reached a record 68.4 in April.

...

The survey's employment index declined to 50.0 from June's 57.4, which was a record. The U.S. may have added 243,000 jobs in July, according to a survey of economists before Friday's employment report from the Labor Department. Service-providing industries added 122,000 workers in June, which was the smallest increase since February.

The slowdown in hiring last month may have been a blip, economists said.

...

The number of Americans filing first-time claims for unemployment benefits have averaged 345,633 a week so far this year, compared with 402,115 for all of 2003. The four-week moving average of claims was 336,300 in the four weeks ended July 23, according to the Labor Department.