Slow service growth latest sign of weakness
By Burton Frierson
NEW YORK (Reuters) - Growth in the dominant U.S. service sector fell to a four-year low last month while the job market showed only modest improvement, according to reports on Wednesday that reinforced views of a weakening economy.
The Institute for Supply Management said its non-manufacturing index slid to 52.4 in March, down from February's 54.3 and confounding expectations for a rise. Despite the weakness, the ISM's inflation gauged jumped.
Meanwhile, U.S. private employers likely added 106,000 jobs in March, according a private report by ADP Employer Services. That was higher than February's 57,000 gain reported by ADP but still below market expectations.
However, the signs of service sector weakness held sway in the market, initially pushing stocks and the dollar lower but lifting government debt prices, which usually benefit during times of economic weakness.
It also coincided with unexpectedly weak factory orders data for February, released by the Commerce Department.
"It's looking pretty dark," said Richard Dekaser, chief economist at National City Corp. in Cleveland, after the ISM release.
"On the whole, it speaks to the sluggish pace that the economy is moving at in recent quarters."
The ISM services reading comes two days after it reported that manufacturing growth slowed in March while price pressures increased. Continued...







