Service-Sector Activity on the Rise
May. 05, 2004
NEW YORK (AP) _ Service-sector activity carved out another record month of expansion in April, as employment and prices rose, according to a report released Wednesday by a private research group.
The Institute for Supply Management said that its non-manufacturing business index for April rose to 68.4, the best reading ever for the survey that began in 1997. April's level put the overall index well above the 65.8 seen in March _ also a record reading. April's level was also much better than the 65.0 expected by economists.
The ISM's non-manufacturing index is comprised primary of services, which constitute the majority of U.S. economic activity. The index describes how many respondents report rising activity, but doesn't indicate the level of gains. Readings above 50 indicate expansion.
In its report, the group said that its employment index stood at 54.5 in April, after hitting 53.9 in March. The group's new orders index moved to 65.6, versus the 62.8 seen the month before.
Meanwhile, the ISM non-manufacturing prices index continued to indicate growing price pressures in the U.S. economy. It rose to 68.6, after having stood at 65.7 in March. April's price index gain was the 25th straight month of expansion, and those who were seeing the most pressure were in construction and legal services, among other groups.
In a conference call with reporters, ISM non-manufacturing survey director Ralph Kauffman said some respondents were reporting rising steel prices and shortages. Otherwise, ``there was not a whole lot of worry about inflation in this report,'' he said.
The ISM service-sector activity report came during a key week for financial markets. The Federal Reserve met on Tuesday in a critical gathering that opened the door for the first interest-rate hike since May 2000. While the central bank refrained from adjusting its 1 percent short-term target rate, it laid out a more optimistic view of the economic outlook.
The ISM reported earlier this week that factory activity in April was also strong.