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ISM Services Shows Slower Expansion

Todd Bunton

Economic activity in the non-manufacturing sector grew for the 39th consecutive month, albeit at a slower pace, in March, according to a survey of U.S. purchasing and supply executives conducted by the Institute for Supply Management.

The non-manufacturing index registered 54.4%, which was below the consensus of 55.0% and down from February's reading of 56.0%. A reading above 50.0 signals expansion. This month's reading was basically in-line with its 12-month average of 54.5%.

All 10 of the sub-components in this report signaled expansion. However, the 'New Orders' and 'Employment' components slowed the most from February. The chart below from Calculated Risk Blog plots the 'Employment' sub-component against the overall index:

Considering that we also received a somewhat disappointing ISM manufacturing survey on Monday, do these two "misses" have you concerned at all about the pace of economic growth? Chime in below.

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