US Services Sector Shines Briefly Amid Virus Gloom

The US service sector was healthier than expected in March, according to an industry survey released Friday, but the outlook was sure to change as the coronavirus pandemic wallops the economy

Washington, (APP - UrduPoint / Pakistan Point News - 3rd Apr, 2020 ) :The US service sector was healthier than expected in March, according to an industry survey released Friday, but the outlook was sure to change as the coronavirus pandemic wallops the economy.

As businesses have shut down on government orders or their own volition to try to stop the spread of the virus, service sector employees have been well represented among the millions of people filing for jobless benefits in the last two weeks of March.

The sector is set to join much of the American economy in plunging into malaise in the coming weeks, but the survey from the Institute for Supply Management showed the non-manufacturing index at 52.5 percent, still above the 50 percent threshold indicating growth.

However, evidence of headwinds were apparent: March's reading is a drop of 4.

8 points from February's 57.3 percent, and the new orders index plunged 10.2 points to 52.9 percent.

Services is by far the largest segment of the US economy, and many firms reported the COVID-19 outbreak had hampered their businesses.

"The coronavirus is effecting every aspect of business," a real estate, rental and leasing business said in a comment submitted to the survey, while a mining and a construction business reported more moderate impacts.

Ian Shepherdson of Pantheon Macroeconomics called the better-than-expected result "a pleasant surprise" but said "next month will be much worse."He pointed to a sharp drop in the ISM employment index of 8.6 percentage points to 47 percent as a sign of trouble to come.

"We think the survey will not hit bottom until May or June, at much lower levels than in March," he said.