April 3 (Bloomberg) — Service industries picked up in March after expanding at the slowest pace in four years, showing the biggest part of the U.S. economy was starting to thaw along with the weather.
The Institute for Supply Management's non-manufacturing index rose to 53.1, less than forecast, from 51.6 in February, the Tempe, Arizona-based group said today. Readings greater than 50 signal expansion. The median projection in a Bloomberg survey of economists called for a gain to 53.5.
American shoppers began returning to stores and auto dealers as weather conditions improved and job gains helped brighten spirits. The pickup in optimism among service companies followed a report earlier this week showing a faster pace of expansion at manufacturers, indicating the economy was building momentum into the second quarter.
"The outlook is generally positive," David Sloan, a senior economist at 4cast Inc. in New York, said before the report. "Employment growth will be driving demand. There has been some negative weather effect, but I expect that to fade."
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