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ECONOMIC REPORT: ISM services activity slows in March; Index slips to 52.4%, lowest since April 2003
By Greg Robb, MarketWatch Last Update: 10:35 AM ET Apr 4, 2007

WASHINGTON (MarketWatch) - Nonmanufacturing sectors of the U.S. economy slowed unexpectedly in March, the Institute for Supply Management reported Wednesday.
The ISM services index fell to 52.4% from 54.3% in March. This is the lowest level since April 2003.
The drop surprised economists who were looking for the index to rise to 55.0%.
Anthony Nieves, chair of the IMS nonmanufacturing survey committee and senior vice president for Hilton Hotels Corp., said he agreed with one survey participant who said business was OK but not great.
"Business is off, but it is not doom and gloom out there," said Nieves.
Nieves said firms were tightening their belts after a rise in fuel costs in late February and March.
The price index jumped to 63.3% from 53.8% on higher costs for fuel and petroleum-based products.
Readings over 50% in the ISM index indicate expansion in the sector. So the index is showing slow growth, not contraction. The index has been above 50% for 48 straight months.
The ISM measures the breadth of economic health across firms, rather than the intensity of growth.
This month, 10 of 18 industries were expanding in March, led by utilities and educational services.
Sometimes the components of this survey can diverge notably from the headline business activity index.
In March, the components were choppy.
New orders fell to 53.8% from 54.8% in the previous month and the employment index fell to 50.8% from 52.2%.
Inventories rose to 52.0% from 50.5% and the backlog of orders index rose to 52.5% from 47.0% in the previous month.
In a separate report, the Commerce Department reported that factory orders rose 1.0% in February.

10:02 AM ET
U.S. March ISM services below consensus 55.0%
U.S. March ISM services 52.4% vs 54.3% in Feb.

10:00 AM ET
U.S. Feb. nondurable goods orders rise 0.2%
U.S. Feb. durable goods orders rise 1.7%
U.S. Feb. factory orders ex-transportation decline 0.4%
U.S. Feb. factory orders rise 1.0% vs. 1.9% expected

By Robert Schroeder
Last Update: 10:00 AM ET Apr 4, 2007

WASHINGTON (MarketWatch) -- Orders for U.S.-made factory goods climbed 1.0% in February to a two-month high as orders for non-defense aircraft surged, the Commerce Department reported Wednesday. Orders for new civilian aircraft rose by 88.4% following a drop of 60.4% in January. Outside of transportation equipment, however, orders for factory goods dropped by 0.4% in February, the data show. Shipments declined by 0.5% in February. Economists surveyed by MarketWatch were expecting factory orders to rise by 1.9% in February.