Gains in Services Signal Rebound Ahead for U.S. Growth: Economy

By Jeanna Smialek Apr 3, 2014 12:37 PM ET

Service industries picked up in March after expanding at the slowest pace in four years.

Service industries picked up in March as the biggest part of the U.S. economy began to recover from the unusually harsh winter weather, showing growth will speed up in the second quarter.

The Institute for Supply Management’s non-manufacturing index rose to 53.1 from a four-year low of 51.6 in February, the Tempe, Arizona-based group said today. Readings greater than 50 signal expansion. Other reports showed claims for jobless benefits rose last week, consumer confidence improved and the trade deficit widened in February.

Last month’s gain in services was paced by a rebound in hiring as companies from retailers to construction firms and government agencies filled vacancies, bolstering expectations that a report tomorrow will show the labor market improved. Combined with a pickup in orders, the figures indicate the economic expansion will strengthen after what’s shaping up to be the weakest quarter in a year.

“We have growth accelerating over the rest of the year after a weather-weakened” first quarter, said Samuel Coffin, an economist at UBS Securities LLC in Stamford, Connecticut, the top forecaster of ISM services in Bloomberg data going back two years. “We’re returning to more normal hiring activity after a long winter.”

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http://www.bloomberg.com/news/2014-04-03/service-industries-in-u-s-expanded-at-faster-pace-in-march-1-.html