The American service sector shrank in January, but less severely than expected, according to a report released Wednesday.þþThe Institute for Supply Management said its non-manufacturing index came in at 42.9 in January compared with 40.1 in December.þþThe level of 50 separates expansion from contraction. The index dates back to July 1997.þþEconomists had expected a reading of 39.0, according to the median of 75 forecasts in a Reuters poll, which ranged from 37.0 to 44.0.þþThe service sector represents about 80 percent of economic activity, including businesses such as banks, airlines, hotels and restaurants.þþIn another report, job loss in the private sector slowed slightly in January, according to the ADP Employer Services on Wednesday that came in slightly below economists’ expectations.þþADP said private employers cut 522,000 jobs in January compared with a revised 659,000 jobs lost in December. The December job cuts were originally reported at 693,000.þþEconomists had expected 530,000 private sector job cuts in January, according to the median of 27 forecasts in a Reuters poll, which ranged widely from a drop of 720,000 to losses of 495,000.þþAs of its December release, the ADP methodology was revised in an effort to make it more closely predict the outcome of the government’s non-farm payrolls report, which is scheduled to be released on Friday and is expected to show 525,000 jobs were lost throughout the economy in January.þþThe ADP data series dates back to January 2001. The report was jointly developed with Macroeconomic Advisers .þþ
Source: NY Times
