Services Accelerate, Hiring Picks Up: U.S. Economic Takeaways

  • Non-manufacturing gauge rises for first time in five months
  • Job openings ease as companies step up pace of hiring

What you need to know about Tuesday’s U.S. economic data:


  • Rose to 54.5 from 53.4, first increase in five months
  • Index of new orders climbed to 56.7 from 55.5
  • Business activity gauge increased to 59.8 from 57.8
  • 12 of 18 non-manufacturing industries expanded in March

The Takeaway: Because they account for almost 90 percent of the economy, a faster pace of activity at service producers helps allay concern that plunging commodities prices and lukewarm overseas markets were spilling over more broadly across the U.S. The pickup comes on the heels of better news on the manufacturing front, with data last week showing the ISM factory gauge rose in March for the first time in seven months. ISM services survey chairman Anthony Nieves said the data signal “a little bit more confidence in the air” that bodes well for hiring. David Sloan, senior economist at 4Cast Inc., is less sanguine: It’s “a still weak picture, consistent with fairly subdued growth.”


  • Openings eased to 5.45 million from 5.6 million (revised from 5.54 million)
  • Number of hires increased to 5.42 million, highest since November 2006, from 5.13 million
  • Some 3 million voluntarily quit their jobs, up from 2.9 million

The Takeaway: The openings and labor turnover data are further evidence of a job market that’s doing the heavy lifting for an economy battered by slow global growth. The report offered double-barreled good news, with more workers finding positions and an increase in Americans who felt confident enough to leave their jobs. Layoffs and discharges remain muted, corroborating jobless claims figures that linger near the lowest in decades.


  • Rose 2.6 percent to six-month high of $47.1 billion (forecast was $46.2 billion)
  • Imports increased 1.3 percent to $225.1 billion, led by food, pharmaceuticals, and aircraft
  • Exports climbed 1 percent to $178.1 billion, restrained by less demand for industrial supplies and capital equipment
  • Shipments to China were the lowest since June 2011, exports to South and Central America were the weakest in six years

The Takeaway: The wider-than-expected trade gap represents another blow to first-quarter growth estimates. After adjusting the net exports for changes in prices, which generate the numbers used to calculate gross domestic product, the deficit grew to $63.3 billion, the largest in almost a year. Economists at JPMorgan say 1Q GDP is now tracking around 0.7 percent, down from a 1.2 percent pace before the trade figures and Monday data on factory orders and inventories. American exporters have had a rough go of it for more than a year as the dollar appreciated and global demand weakened. However, some relief may be at hand as the greenback has depreciated about 5 percent since a peak in early January.

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