Page 7 - ATODAY
P. 7
U.S. NEWS A7
Friday 4 March 2016
US Financial Front:
Growth at services firms skids to slowest pace in 2 years
JOSH BOAK ment measure going for- Employee Brittney Bounds bags groceries for customer Esther Franklin, left, at Compton’s Market
AP Economics Writer ward. “Where the concern in Sacramento, Calif. On Thursday, March 3, 2016, the Institute for Supply Management, a trade
WASHINGTON (AP) — A pri- might be is if we see this group of purchasing managers, issued its index of non-manufacturing activity for February.
vate survey says the growth trend continue for the next
of U.S. services companies two or three months,” he (AP Photo/Rich Pedroncelli)
in February slowed to the said.
worst pace in two years, as The ISM is a trade group of cover from the 2008 finan- cause of consumers. rose 0.4 percent last month
a measure of hiring turned purchasing managers. Its cial market collapse. The The low 4.9 percent un- to a seasonally adjusted
negative. services survey covers busi- result has been a decline in employment rate has cor- annual rate of 5.47 million,
The Institute for Supply nesses that employ the oil prices and a rising dollar responded with a pick-up according to the National
Management said Thurs- vast majority of workers, in- that have hurt orders at U.S. in wage growth and more Association of Realtors. The
day that its services index cluding retail, construction, manufacturers. spending on vehicles, hous- improvement follows a solid
slipped to 53.4 last month health care and financial Yet the global pressures ing and meals out. 2015 when sales achieved
from 53.5 in January. Feb- services companies. have caused some weak- Auto sales rose 7 percent their highest level in nine
ruary’s reading was the The survey found that most nesses to emerge in the over last February to 1.3 mil- years.
lowest since February 2014. service sectors are ex- services sector, although lion vehicles, according to And spending at restau-
Still, any reading above panding, although it noted they have yet to derail the Autodata Corp. rants has risen 6.1 percent
50 signals that services that retail, entertainment broader U.S. economy be- Purchases of existing homes over the past 12 months.
firms are expanding. The and mining contracted last
survey showed contin- month. Services overall ex-
ued but slower growth pansion have contrasted
for new orders, while the with a shrinking manufac-
pace of business activity turing sector. ISM reported
improved. But the employ- this week that its manufac-
ment component was 49.7, turing index stood at 49.5
which signals contraction. in February — a level that
This could raise a red flag shows factory activity as
ahead of the government contracting. Manufactur-
jobs report being released ing has now been shrinking
Friday, with experts pro- for five straight months.
jecting that employers The decline in factory activ-
hired nearly 200,000 work- ity stems from a global slow-
ers last month. down. Economic growth in
U.S. economic growth in- China has become mired
creasingly hinges on con- with doubts. Its currency is
sumers, as uncertainty shedding value, industrial
about global growth has firms plan to cut jobs, and
hampered manufacturing high debt loads weigh on
and exports. Home and corporate balance sheets.
auto sales have steadily Europe has struggled to re-
advanced over the past
year, while spending at US factory orders up 1.6 percent, best in 7 months
restaurants has also im-
proved. Those gains have MARTIN CRUTSINGER the biggest jump since has made their goods less goods, including chemi-
spread to hiring as busi- AP Economics Writer June, though it was driven competitive. And a sharp cals, paper and clothing,
nesses in the services sec- WASHINGTON (AP) — Or- by demand in the volatile fall in oil prices has hurt in- fell 1.4 percent in January
tor account for 90 percent ders to U.S. factories in- category of commercial vestment. after a 1.1 percent drop in
of the 2.7 million jobs add- creased in January by aircraft. At the same time, Demand for durable goods December. This category
ed in the past 12 months. the most in seven months, orders in a core sector that — items ranging from au- has posted a string of de-
“We’re continuing on the while a key category that reflects business investment tos and appliances to air- clines in part because of
path of growth,” said An- tracks business investment rose 3.4 percent — the planes and battleships — the big drop in energy pric-
thony Nieves, chair of plans rose by the largest sharpest one-month gain increased 4.7 percent in es. The data is not adjusted
the ISM non-manufactur- amount in 19 months. since June 2014. January, slightly lower than for price changes.
ing businesssurvey commit- Factory orders rose 1.6 per- U.S. manufacturers’ exports the 4.9 percent the gov- Orders for commercial air-
tee. cent in January after two have been hurt this year ernment had estimated craft jumped 54.4 percent,
But Nieves cautioned that months of declines, the by spreading economic in a preliminary report last with smaller gains for mili-
it would be worth moni- Commerce Department weakness overseas and week. tary aircraft and autos and
toring the index’s employ- reported Thursday. It was by a strong dollar, which Orders for nondurable auto parts.
