U.S. Non-Manufacturing Index Expands In April To 52 Percent

Washington, D.C. (AHN) - The U.S. service industries for the month of April unexpectedly expanded, according to a report released on Monday in Washington.

The Institute for Supply Management's non-manufacturing index rose to 52 percent in April, compared to 49.6 percent registered in March.

"The service sector has been a positive force in the economy and will continue to offset weakness in the goods- producing sector," Julia Coronado, senior U.S. economist at Barclays Capital Inc. in New York, who forecast a reading of 50.5, told Bloomberg.

"This is definitely a positive indication that some of the worst outcomes that people are expecting won't be realized."

Market analysts had expected the measure to contract for the fourth consecutive month in April led by the housing market slump as well as credit crisis.

Economists had projected the ISM index for April to come in at 49.8 percent.

In April, the ISM's business activity/production index was 50.9 percent, compared to March's 52.2 percent. The new orders index was 50.1 percent, compared to 50.2 percent the prior month.

The Tempe, Arizona-based ISM's report of non- manufacturing index plus the manufacturing index and the government's employment report last week, shows that the U.S. economy may be gradually improving.

Meanwhile, twelve of the 18 industries included in the group's report were expanding for the month of April, led by entertainment and real estate, according to MarketWatch.