Service Sector Strong in March

The Institute for Supply Management's index jumps to 65.5% in March.
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Another closely-watched report on economic activity in March was much stronger than expected.

The Institute for Supply Management's survey of the services industry released Monday rose to 65.8, a record high.

Sub-indices for new orders, employment, prices, exports and inventories all showed increases, with 15 of the 17 industries surveyed reporting growth.

The consensus estimate of economists was for a reading of 61.5 following February's 60.8.

The ISM's manufacturing survey released last week showed activity unexpectedly rose in March, with the index hitting 62.5 from 61.4 in February, as both new orders and production remaining strong.

The employment sub-index rose for the fifth month in a row to its highest level since 1987.

That helped temper recent consumer and market concerns about the job market and was followed by the government's report on nonfarm payrolls last Friday, which showed the economy created 308,000 jobs in March, the most in four years.

Until the recent trio of reports, most economic reports -- all of them covering activity in February -- suggested the recovery was slowing more than expected after unusually strong growth in the third and fourth quarters of 2003.