Yesterday’s unexpected rise in the nonmanufacturing sectors of the U.S. economy delivered another blow to pessimists anticipating an imminent slowdown.
The Institute for Supply Management reports that its nonmanufacturing index rose to 60.5% last month from 60.1% in February. That’s well above the 59% reading called for by the consensus estimate. March’s reading also confirms the sharp rebound in February after January’s drop to 56.8%, a dip that gave short sellers in the stock market a momentary burst of optimism.
But it’s getting tougher to see the glass half empty rather than half full. Indeed, the service side of the economy (which dwarfs the manufacturing component) is expanding at a healthy clip. What’s more, its broad based. “Thirteen of 17 non-manufacturing industry sectors report increased activity in March, compared to 10 that reported increased activity in February,” ISM’s press release advises.
Nomura Securities’ chief economist in New York, David Resler, yesterday observed in a note to clients that the ISM nonmanufacturing index’s rise last month “is well above its six-month average and signals a broadening expansion in the services sector.”
More encouraging news on divining the future for growth comes this morning by way of the weekly update on jobless claims. Initial claims for unemployment insurance dipped below 300,000 again for the week ended April 1, the Labor Department reports. That’s down by 5,000 for the week, and 47,000 below the year-earlier figure. If a broad economic stumble is coming, it’s not evident in the jobless claims numbers.
Ditto for the so-called continuing claims for unemployment, a series that dropped to its lowest levels in the week through March 25 since January 2001, as the chart below illustrates.
