Thursday, June 6, 2013

Two Sides of the Coin

Two halves of the economy appear to be moving in different directions, according to some economic indicators that have come out this week. While the manufacturing sector shows signs of struggling, the service sector is signaling growth ahead.

Let's do the bad news first: The Institute for Supply Management's factory index shrank in May, and is now down to its lowest level since June 2009. It was the third straight month in which that figure declined. The number dropped from 50.7 to 49, which troubling in a measure where 50 represents the dividing line between growth and decline.

But the services part of the economy continues to grow. According to the ISM's non-manufacturing index, growth in the service industries picked up speed in May. Using the same scale as the manufacturing index, the service index is now at 53.7.

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