Wednesday brought about the report from the Institute for Supply Management in the non-manufacturing sector. The ISM non-manufacturing figure for March came in 54.4%. Unfortunately that is shy of the 56.0% expected by Bloomberg, as well as shy of the 56.0% recorded back in February. Today’s services report is on the heels of a weaker than expected manufacturing report as well.

The following is a breakdown of the report:

• Business Activity Index at 56.5%, a drop of 0.4 points but still positive for 44 straight months.
• New Orders Index at 54.6%, a drop of a sharp 3.6 points.
• Employment Index at 53.3%, a drop of 3.9 points.

The only good news today is on the inflation front. The Prices Index fell by a full 5.8 percentage points to 55.9%, which indicates that prices increased at a slower rate in March versus February.

Growth was reported by 15 of the non-manufacturing industries, and the majority of comments continue to be positive about business conditions. That being said, there is still an underlying concern regarding the uncertainty of the future economy.

This is simply case of weaker-than-expected growth. With a slower PMI Manufacturing and Non-manufacturing report, we cannot help but comment that this was for the final month of the first quarter, and first quarter earnings will start to be reported next week.

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