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Economics

The Economy: The Service Sector Goes Wobbly

An unexpected plunge in the Institute for Supply Management's nonmanufacturing sentiment index for January heightens recession fears

by BW, Action Economics, and S&P staff

Now it's the service sector's turn to feel the pain—and the implications for the broader economy are resoundingly negative. On Feb. 5, the Institute for Supply Management's (ISM) nonmanufacturing composite index, a survey of conditions in the service sector, plunged to 44.9 in January from 53.2. Markets expected a modest decline to 53.0. A reading below 50 on the index indicates recessionary conditions.