Thursday, May 3, 2012

Services Weak in April

The service sector was unexpectedly weak in April, as the ISM Non-Manufactuiring index fell 2.5 points to 53.5. The second monthly decline puts the index at its lowest level since December 2011. Despite a strong manufacturing report yesterday, it appears that the service sector has slowed from the rapid pace seen at the beginning of the year. Any reading above 50 indicates industry expansion, so April's slowdown still indicates growth. The services sector has now seen expansion for 28 consecutive months.

The details of April's report deteriorated as well, with new orders falling 5.3 points to 53.5. New orders have now fallen by 7.7 points in the past two months. The employment index also declined noticeably, from 56.4 to 54.2. There were pockets of good news, however, as export orders jumped 5.5 points to 58.0. Prices paid also saw a notable decline dropping from 63.9 to 53.6.

Read the report.

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