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. Oil Services Industry ETF

    A sector exchange-traded fund (ETF) that invests in companies ...
Related Articles
  1. Term

    What's a Sector?

    The term sector has several applications in economics and finance.
  2. Options & Futures

    Investment Services Stump Investors

    What you're getting isn't easy to determine. Find out how to get your money's worth.
  3. Investing Basics

    Understanding the Financial Sector

    The financial sector is a category of stocks comprised of firms that provide financial services to commercial and retail customers.
  4. Stock Analysis

    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.
  5. Savings

    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.
  6. Fundamental Analysis

    Emerging Markets: Analyzing Brazil's GDP

    Examining the GDP composition of one of the BRIC members, Brazil.
  7. Fundamental Analysis

    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.
  8. Mutual Funds & ETFs

    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.
  9. Professionals

    Introduction

    Economics, put simply, is the study of shortages – supply vs. demand. As the demand for a product or service rises, the price of those goods or services will tend to rise. Alternatively, ...
  10. Investing Basics

    How to Choose the Right Sector Funds

    Adding sector funds to your portfolio can pay off but it's important to make sure you're choosing the right market niche.
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. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center