Analysts keeping an eye on the country's services sector after it pulls back in March. Jeanne Yurman reports.
On the heels of an ugly jobs report for March, growth in the U.S. services sector slowed to its lowest level in three months. The Institute for Supply Management's services sector reading fell from 56.9 in February to 56.5 last month. The report isn't a market mover. But a pullback in a sector that employs nine out of every 10 Americans bares watching says Eric Wiegand, Senior Portfolio Manager at US Bank. SOUNDBITE: ERIC WIEGAND, SENIOR PORTFOLIO MANAGER, U.S. BANK (ENGLISH) SAYING: "The data has been somewhat mixed, you know, certainly from a manufacturing standpoint. But services have generally tended to hold up reasonably well. While it isn't necessarily a market leading indicator, it's something that we'll be monitoring for us, as we move through the month of April." Digging further into the data, business activity was also down hitting the lowest level in a year. Any further pullbacks in the services sector could have a knock-on effect for the broader jobs market. John Lonski, Chief Economist, at Moody's Analytics SOUNDBITE" JOHN LONSKI, CHIEF ECONOMIST, MOODY'S ANALYTICS (ENGLISH) SAYING: "What may concern us, though, in the not too distant future, the service sector may find it has more than enough employees on hand, and thus we would look for smaller additions to payrolls as we move forward, and that might very well be the case." This latest report adds to concerns about a recent string of soft economic data, including jobs, factory activity and consumer spending. The worry? That the data indicates these factors are being affected by more than just a harsh winter but a slowdown in the U.S. economy. For now Lonski believes America's economy is still generating enough sales and consumer spending growth to boost the services sector. And he notes report did include a couple bright of spots including a jump in exports and new orders.