Service Sector Expanded in April
The service sector expanded in April after contracting in March, a sign that some companies boosted activity after the end of the war in Iraq.</br></br>The Institute for Supply Management said its nonmanufacturing index of purchasing managers rose to 50.7 in April from 47.9 in March. Index readings above 50 indicate expansion of activity, while readings below 50 show contraction.</br></br>The group recorded increases in new orders for services, and noted that falling oil prices were lowering price pressures.</br></br>The service-sector ISM report contrasts with a slew of recent economic data that have been on the weak side. Last Thursday, the ISM reported broad-based weakness in its manufacturing index for April, in a release dominated by more job losses and a decline in new orders for manufactured goods. Meanwhile, the government said Friday that U.S. companies shed 48,000 payroll positions in April and the unemployment rate ticked up to 6% from 5.8% the month before.</br></br>The Federal Reserve has argued this year's weak economic activity can be traced to anxiety about the war in Iraq. Its officials expect the end of the conflict to bring better economic performance in the months ahead as the economy's fundamental strength begins to show through.