90% of Economy Now Indicating Expansion

- ISM Non-Manufacturing for April rose to 52.0 versus estimates of 49.1 and a reading of 49.6 in March.

BOTTOM LINE: Service industries in the US, which make up almost 90% of the economy, unexpectedly expanded in April, signaling the damage from the housing slump and credit crisis may be dissipating, Bloomberg said. The Employment component of the index jumped to 50.8, the highest level so far this year, versus 46.9 in March. The Supplier Delivery component surged to 56.0 versus 49.0 in March. The New Orders component fell slightly to 50.1 from 50.2 the prior month. The Prices Paid component rose to 72.0 from 70.8 in March. Builders, which are included in this index, have been restraining overall growth since the first quarter of 2006. This indicator joins a number of others that indicate the US economy is not in a recession, notwithstanding the overwhelming belief by the bearish herd that it is. I expect this indicator to indicate even greater expansion in May as the effects of the economic stimulus package further take hold.