U. S. Services Sector Entering Into Recession According to NAPM Survey. June 5, 2001. By Jaime Niño
Jun 5, 2001
For a second month in a row the National Association of Purchasing Management (NAPM) non-manufacturing index indicated a contraction in services sector activity. The index in May was 46.6 bellow the 47.1 reading in April. Readings bellow the 50-point level indicates a contraction in activity. The survey’s employment index also contracted from 46.7 to 46.6 suggesting for a third month in a row that reduction in employment in the services sector. This trend was confirmed by employment data from the U.S. Labor Department released on June 2, 2001 that showed a reduction in 19,000 jobs in the sector.
Historically, contractions in the manufacturing sector are felt in the services sector with a long lag, while service sector recoveries are quite speedily after manufacturing picks up. Unfortunately, the NAPM index of manufacturing activity was 42.2 indicating that contraction in the manufacturing sector continues.
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