ISM Non-Manufacturing Decelerates, Still Expanding

- ISM Non-Manufacturing for February fell to 54.3 versus estimates of 57.1 and a reading of 59.0 in January.

BOTTOM LINE: Service industries in the US expanded at a slower pace in February, Bloomberg reported. However, the employment component of the index rose to 52.2 from 51.7 the prior month. As well, the inventories component rose to 50.5 from 47 in January. Finally, the prices paid component fell to 54.8 from 55.4 in January. Consumer spending, which comprises more than two-thirds of the economy, remains healthy. Spending increased more than forecast in January and incomes rose by the most in a year, reports showed last week. I continue to believe the service sector will remain healthy over the intermediate-term as stocks resume their uptrend, weather becomes more seasonal, housing stabilizes at relatively high levels, interest rates remain low, inflation decelerates and the job market remains healthy.