U.S. Services Growth Hits Four-Year Low

Apr. 5.07 | About: SPDR S&P (SPY)

The Institute for Supply Management [ISM] reported yesterday that in March, the nonmanufacturing sector of the economy slowed to its weakest level in four years, raising concerns that the economy is more vulnerable than originally thought to weakness in the housing and manufacturing sectors. The ISM Services Index fell to 52.4% from 54.3%, its lowest since April 2003. Economists had projected a rise to 55.0%. A reading above 50% indicates expansion, so the decline implies a slowing of growth rather than a contraction. Still, economists are apprehensive about the health of the economy. This concern is magnified by a separate report from the Commerce Department that indicates factory orders rose 1.0% in February, below a 1.9% consensus forecast. Service providers like FedEx have been affected by a rise in prices for fuel and petroleum-based products, which reached their highest level since last August. The high prices have been accompanied by a drop in new orders to a seven-month low.

Sources: MarketWatch, Bloomberg
Commentary: Factory Orders Gain, But Miss ExpectationsISM Commodities Survey Shows Likelihood of Up-tick in InflationQ4: The Third Straight Quarter of Below-Trend Growth
Stocks/ETFs to watch: ETFs: S&P 500 Index (NYSEARCA:SPY), Diamonds Trust Series 1 ETF (NYSEARCA:DIA), iShares Lehman Aggregate Bond (NYSEARCA:AGG)

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