ISM Services Index Improves, but Shows Contraction

The U.S. economy’s service showed continued contraction in March, but improved from February, the Institute for Supply Management said Thursday.

ISM’s monthly services index improved to a reading of 49.6, from 49.3 the previous month, the group said. The index hit a record low of 44.6 in January.

The services index measures non-manufacturing components of the economy. Figures of more than 50 indicate expansion, while below that level shows contraction.

Analysts had expected the index to fall to 48.5, Bloomberg reported.

The services sector, which includes transportation, retail sales and financial services, accounts for nearly two-thirds of the U.S. gross domestic product.