Your Economy (No Politics)

[Bullwinkle]

U.S. ISM services index shows steady growth in March -
Wednesday, April 5, 2006 2:56:00 PM
http://www.afxpress.com


WASHINGTON (AFX) -- Activity in the non-manufacturing sectors of the U.S. economy continued at a steady pace in March, the Institute for Supply Management said Wednesday. The ISM services index edged higher to 60.5% from 60.1% in February. It was the 39th consecutive month of growth and the highest reading since December. The increase was unexpected. Economists had been expecting a small decline to 59.5%, according to a survey by MarketWatch. There was little reaction to the report in financial markets. Readings over 50% in the diffusion index indicate expansion. Firms are asked if business is better, worse or the same, producing an index that shows the breadth of growth across the economy. "I think it indicates that the economy seems to be growing at probably the same rate in March as it was in February," said Ralph Kauffman, chair of the ISM non-manufacturing survey committee

Economists at Bear Stearns told clients that the gain in the ISM services index "suggests that economic growth in this sector remains strong." The subindexes were mixed in March. New orders and inventories increased at a faster rate in March. Employment went down

Thirteen of 17 industries reported growth in March, compared with 10 in February

The industries with the fastest growth included entertainment, utilities, mining and insurance. Industries with no decreasing activity were real estate and health services. Two industries, agriculture and transportation, reported activity the same as last month

The new orders index rose to 59.5% in March from 56.2% in February, and the inventories index rose to 54.0% from 53.0%. The employment fell to 54.6% from 58.2% in the previous month. Kauffman said he had no explanation for the decline

Inflation pressures eased in March, with the prices paid index slipping to 60.5% from 64.8%. Concerns about higher prices seemed to be dissipating, the ISM said.

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