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 Says:

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 Links:
The key to survival for many financial institutions will be to efficiently serve a global customer base. The Globalization Of Financial Services
What you're getting isn't easy to determine. Find out how to get your money's worth. Investment Services Stump Investors
Boost returns by adding insurance, tax plans or mortgages to your list of service offerings. New Services Usher In New Clients
What people buy and where they shop can provide valuable information about the economy. Using Consumer Spending As A Market Indicator
Learn the logic behind the belief that reducing government income benefits everyone. Do Tax Cuts Stimulate The Economy?
It's the key to any market economy, so investors need to learn the measures and how to analyze them. Consumer Confidence: A Killer Statistic
Emerging markets provide new investment opportunities, but there are risks - both to residents and foreign investors. What Is An Emerging Market Economy?

Copyright ©2010, Investopedia.com - Owned and Operated by Investopedia US, A Division of ValueClick, Inc. All rights reserved.