The US service sector contracted for the third consecutive month in March, according to a report released on Thursday, though the rate of retrenchment was less severe than economists had expected. The Institute for Supply Management's non-manufacturing index came in at 49.6, slightly up from 49.3 in February but below the 50 mark that separates growth from contraction.
The result was above the record-low 44.6 hit in January. It was better than the median forecast for 48.5 that economists predicted in a Reuters poll, which led stocks to cut their losses on Wall Street and helped the dollar gain against the euro and yen.
The index has now been below below 50 for three consecutive months, the first time it has been mired in such a slump since January 2002, when the economy was still feeling the lingering effects of the last recession. The report raised worries about inflation, with its prices paid index rising to 70.8 in March from 67.9 in February. It also showed no improvement in the jobs picture, with the employment index remaining at 46.9 in March.
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