Service Sector Contracts in March (economy may be sliding into recession)

[Omaha Steve]

http://money.excite.com/jsp/nw/nwdt_rt_top.jsp?news_id=ap-d8vqf3b81&

Thursday April 3, 11:00 AM EDT

NEW YORK (AP) — The Institute for Supply Management said Thursday that the nation's service sector — which includes retailers, the hotel business, insurance and various social services — contracted in March, but not as much as the month before. Still, worries deepened about soaring prices for raw materials.

The institute, a trade group of purchasing executives, said its non-manufacturing index registered 49.6 last month, compared with 49.3 in February.

A reading below 50 indicates contraction, while a reading above 50 indicates growth.

It's the third consecutive month of contraction, but the March reading was a bit stronger than the 49.0 expected by analysts surveyed by Thomson/IFR.

Earlier this week, the institute said its index of manufacturing contracted for a second consecutive month in March, but was a bit improved from the month before.

In Washington, meanwhile, the Labor Department said that the number of new people signing up for unemployment benefits last week shot up to the highest level in more than two years. The department said new applications filed for unemployment insurance jumped a seasonally adjusted 38,000 to 407,000 for the week ending March 29.

The reports provided further evidence that the economy may be sliding into recession.

FULL story at link.