http://news.yahoo.com/s/ap/20080403/ap_on_bi_ge/economy_services
Service sector contracts in March
By EILEEN ALT POWELL, AP Business Writer
8 minutes ago
NEW YORK - The Institute for Supply Management said Thursday that the
nation's service sector -- which includes retailers, the hotel
business, insurance and various social services -- contracted in March,
but not as much as the month before. Still, worries deepened about
soaring prices for raw materials.
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The institute, a trade group of purchasing executives, said its non-
manufacturing index registered 49.6 last month, compared with 49.3 in
February.
A reading below 50 indicates contraction, while a reading above 50
indicates growth.
It's the third consecutive month of contraction, but the March reading
was a bit stronger than the 49.0 expected by analysts surveyed by
Thomson/IFR.
Earlier this week, the institute said its index of manufacturing
contracted for a second consecutive month in March, but was a bit
improved from the month before.
In Wa****ngton, meanwhile, the Labor Department said that the number of
new people signing up for unemployment benefits last week shot up to
the highest level in more than two years. The department said new
applications filed for unemployment insurance jumped a seasonally
adjusted 38,000 to 407,000 for the week ending March 29.
The re****ts provided further evidence that the economy may be sliding
into recession.
In morning trading, the Dow Jones industrial average tumbled 48.20, or
0.4 percent, to 12,557.63. The Standard & Poor's 500 and the Nasdaq
composite index also were down.
Purchasing managers surveyed by the institute, which is based in
Tempe, Ariz., said they were especially worried about the rising
prices of raw materials.
Anthony Nieves, chairman of the institute's non-manufacturing business
survey committee, said members' comments "reflect concern about rising
fuel and energy costs and the impact they are having on commodity
prices."
The price index soared to 70.8 in March from 67.9 the month before.
New orders and ex****t orders rose, but employment contracted with a
March reading of 46.9, the same as in February.
Eleven industries re****ted growth last month: real estate, rental and
leasing; mining; agriculture and forestry; construction; information;
miscellaneous services; utilities; retail trade; accommodation and
food services; health care and social assistance; and public
administration.
Six were contracting: trans****tation and warehousing; wholesale trade;
educational services; finance and insurance; management of companies;
and professional, scientific and technical services.
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