Getting the Skinny on Services

Quarterly Revenue for Selected Services U.S. Census Bureau

Services were showing a slight decline from the prior quarter, but still reflecting year-over-year growth in revenues in key areas:

• Information up 2.6%.
• Professional, scientific and technical up 6.0%.
• Administrative and support and waste up 3.0%.
• Selected healthcare services up 6.7%.

We would expect a weaker performance from the fourth quarter, but it is interesting to note that these selected services were stronger than manufacturing.

Digging deeper into the report shows the specific subgroups where there is strength and weakness in year-over-year data:

• Newspaper publishers were down 11.1%.
• Wired carriers were down 4.5%.
• Cable was down 2.5%.
• Data hosting was down 3.2%.

There were some strong subgroups:

• Cable programming (as opposed to carriers) was up 12.5%.
• Architectural and engineering services up 11.1%.
• Employment services up 5.7%.
• Waste management and remediation up 9.3%.
• Internet publishing and broadcasting up 14.3%.
• Hospitals are up 6.5%.
• Nursing and residential care revenues are up 7.5%.

The next report, which comes out March 11, will provide fourth-quarter data. We can expect everything to be weaker, but the general patterns may still prevail.

My colleagues on RealMoney are writing about specific service stocks, and many of their observations seem dead on with these data. Even when the general economy is declining, there are some businesses that show strength. The pattern seems to include the shift from print media to the Internet, the strength in healthcare and the quest for jobs.

Perhaps others will join me in taking advantage of these data. We can all circle March 11 on the calendar to get a leading edge on the next report.

Know What You Own: Some of the most active stocks on Thursday included S&P 500 Depositary Receipts (SPY - commentary - Cramer's Take), Wal-Mart (WMT - commentary - Cramer's Take), PowerShares QQQ (QQQQ - commentary - Cramer's Take), Financial Select SPDRs (XLF - commentary - Cramer's Take), Bank of America (BAC - commentary - Cramer's Take), Citigroup (C - commentary - Cramer's Take) and thinkorswim Group (SWIM - commentary - Cramer's Take). For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.

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At the time of publication, Miller had no positions in the stocks mentioned, although positions may change at any time. Jeffrey Miller is president and CEO of NewArc Investments, a registered investment adviser, and Capital Markets Research.

Miller writes about the market, interpreting data, and finding the right expert at his blog, "A Dash of Insight. He is writing about the 2008 presidential campaign and the implications for individual stocks and the market at Election Stocks. His investment company, with programs for both individual and institutional investors, is NewArc Investments.

Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Miller appreciates your feedback; click here to send him an email.