U.S. Non-Manufacturing Growth Slows

By John S. McClenahen In contrast to U.S. manufacturing's dramatic rate of growth during December 2002, the service sector's rate of growth slowed. Business activity, as measured by Tempe, Ariz.-based Institute for Supply Management's non-manufacturing index, was 54.7% last month, still expanding but nearly three percentage points lower than November's 57.4% rate. December's index also was below the 55% that economists generally expected. Nevertheless, "the reading was high enough to suggest that the overall [U.S.] economy is climbing out of its soft patch," says Maury Harris, chief U.S. economist at UBS Warburg LLC, New York. A figure above 50% indicates that the non-manufacturing sector of the economy is expanding; below 50%, it signals contraction.

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