Service Sector

AAA

DEFINITION of 'Service Sector'

The portion of the economy that produces intangible goods. According to the U.S. Census Bureau, the service sector primarily consists of truck transportation, messenger services and warehousing; information sector services; securities, commodities and other financial investment services; rental and leasing services; professional, scientific and technical services; administrative and support services; waste management and remediation; health care and social assistance; and arts, entertainment and recreation services.


Individuals employed in this sector produce services rather than products. Examples of service sector jobs include housekeeping, psychotherapy, tax preparation, guided tours, nursing and teaching. By contrast, individuals employed in the industrial/manufacturing sector might produce goods such as cars, clothing and toys.

INVESTOPEDIA EXPLAINS 'Service Sector'

Countries with primarily service-based economies are considered to be more advanced than countries with primarily industrial or agricultural economies. Examples of countries with a heavy emphasis on the service sector include the United States, Australia, Japan and the United Kingdom. In the U.S., the Institute for Supply Management's (ISM) monthly index provides a measure of the general state of business in the non-manufacturing sector. Because approximately two-thirds of U.S. economic activity resides in the service sector, the index is considered a measure of the country's overall economic health.

RELATED TERMS
  1. Developed Economy

    While there is no one, set definition of a developed economy ...
  2. Multiple Listing Service (MLS)

    A service provided by a group of real estate brokers. They band ...
  3. Economy

    The large set of inter-related economic production and consumption ...
  4. Full-Service Broker

    A broker that provides a large variety of services to its clients, ...
  5. New Economy

    A buzzword describing new, high-growth industries that are on ...
  6. Ratings Service

    A company, such as Moody's or Standard & Poor's, that rates ...
Related Articles
  1. Professionals

    5 Services To Usher In New Clients

    Discover ways in which advisors are increasingly choosing to promote their businesses.
  2. Retirement

    Consumer Confidence: A Killer Statistic

    The consumer confidence is key to any market economy, so investors need to learn the measures and how to analyze them.
  3. Markets

    Consumer Spending As A Market Indicator

    What people buy and where they shop can provide valuable information about the economy.
  4. Taxes

    Do Tax Cuts Stimulate The Economy?

    Learn the logic behind the belief that reducing government income benefits everyone.
  5. Economics

    What Is An Emerging Market Economy?

    Emerging markets provide new investment opportunities, but there are risks - both to residents and foreign investors.
  6. Options & Futures

    Investment Services Stump Investors

    What you're getting isn't easy to determine. Find out how to get your money's worth.
  7. Insurance

    The Globalization Of Financial Services

    The key to survival for many financial institutions will be to efficiently serve a global customer base.
  8. Investing Basics

    Hong Kong Vs. China: Understand The Differences

    The century-long separation between mainland China and Hong Kong created political and economic gaps which cannot be easily bridged even if the two are officially one country.
  9. Invisible hand is a reference to a famous metaphor used by economist and philosopher Adam Smith.
    Economics

    What does "Invisible Hand" Mean?

    Invisible hand is a reference to a famous metaphor used by economist and philosopher Adam Smith in his classic 1776 book entitled “An Inquiry into the Nature and Causes of the Wealth of Nations.”
  10. Free enterprise is the economic term used to describe an economy with very little government ownership.
    Economics

    What's Free Enterprise?

    Free enterprise is the economic term used to describe an economy with very little government ownership or regulation. In a free enterprise system, competition and the preferences and choices ...

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center