Service Sector

What is the '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.

BREAKING DOWN '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. Services Sector ETF

    Exchange-traded funds (ETFs) that invest in either the consumer ...
  2. Sector

    1. An area of the economy in which businesses share the same ...
  3. Financial Sector

    A category of stocks containing firms that provide financial ...
  4. Quarterly Services Survey

    A survey produced quarterly by the Census Bureau that provides ...
  5. Technology Sector

    A category of stocks relating to the research, development and/or ...
  6. Sector Rotation

    The action of a mutual fund or portfolio manager shifting investment ...
Related Articles
  1. Markets

    What's a Sector?

    The term sector has several applications in economics and finance.
  2. Investing

    Understanding the Financial Sector

    The financial sector is a category of stocks comprised of firms that provide financial services to commercial and retail customers.
  3. Investing

    Investment Services Stump Investors

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

    Global Service Sector Slows, Contracts in the U.S.

    Markit and its partners released February service-sector purchasing manager indices (PMIs) for 12 countries and the global economy Thursday, which show that service sector growth in five countries ...
  5. Managing Wealth

    Tech Stocks Vs. Financial Stocks in 2016

    Consider the arguments for allocating more of your investment portfolio to either the technology sector or the financial sector for 2016.
  6. Managing Wealth

    Teaching Financial Literacy To Kids: Goods And Services

    It's important that kids understand how resources are used to provide goods and services, and how they are made, distributed, consumed and exchanged.
  7. Markets

    Emerging Markets: Analyzing Brazil's GDP

    Examining the GDP composition of one of the BRIC members, Brazil.
  8. Markets

    Is India the Next Emerging Markets Superstar?

    With a shift towards manufacturing and services, India could be the next emerging market superstar. Here, we provide a detailed breakdown of its GDP.
  9. ETFs & Mutual Funds

    The Top 5 Financials Mutual Funds for 2016

    Understand the investment opportunities in the financial services sector, and learn about the best mutual funds for financial service company exposure for 2016.
  10. Markets

    Asian Shares Up on Signs of China Recovery

    Asian stock markets were trading in positive territory after China's economy showed signs of improvement.
RELATED FAQS
  1. What distinguishes the financial services sector from the banks?

    Learn about the difference between the banking industry and the financial services sector and how to distinguish financial ... Read Answer >>
  2. What are the biggest trends affecting the profitability of the financial services ...

    Explore the trends that most affect the financial services sector, including the role of central bank policy and challenges ... Read Answer >>
  3. What other sectors are most similar to financial services?

    Learn about the various components of the financial services sector as the main economic area that allows countries to export ... Read Answer >>
  4. Why should an investor consider the financial services sector?

    Learn why every investor should consider putting money into the financial services sector despite a tumultuous history and ... Read Answer >>
  5. What other sectors are most similar to banking?

    Learn valuable information about the many different subsectors in the financial services sector that most closely resemble ... Read Answer >>
  6. What are the main benchmarks that track the performance of the financial services ...

    Learn about some of the primary benchmarks utilized by investors and analysts to track the performance of the financial services ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center