The service sector is in expansion for the second straight month, with the diffusion index sitting at 53. Anything over 50 is in expansion. Let's take a look at some tables from the February 2010 Non-Manufacturing ISM Report On Business®.



* Non-Manufacturing ISM Report On Business® data is seasonally adjusted for Business Activity, New Orders, Prices and Employment. Manufacturing ISM Report On Business® data is seasonally adjusted for New Orders, Production, Employment, Supplier Deliveries and Inventories.



** Number of months moving in current direction







NMI (Non-Manufacturing Index)



In February, the NMI registered 53 percent, indicating growth in the non-manufacturing sector for the second consecutive month. A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding; below 50 percent indicates the non-manufacturing sector is generally contracting.



NMI HISTORY







INDUSTRY PERFORMANCE (Based on the NMI)



The nine industries reporting growth in February based on the NMI composite index — listed in order — are: Information; Arts, Entertainment & Recreation; Transportation & Warehousing; Public Administration; Professional, Scientific & Technical Services; Other Services; Retail Trade; Wholesale Trade; and Finance & Insurance.



The eight industries reporting contraction in February — listed in order — are: Educational Services; Health Care & Social Assistance; Management of Companies & Support Services; Construction; Utilities; Accommodation & Food Services; Real Estate, Rental & Leasing; and Mining.

City, State Cutbacks Coming

In an amazingly candid appraisal of the sorry state of affairs in New Jersey, Governor Chris Christie laid it on the line in a speech to about 200 mayors at the New Jersey League of Municipalities.



The speech is 24 minutes long and well worth a listen because it is both an honest admission of the problem, and a refreshingly accurate appraisal of what the solutions are. He chastised the legislature, unions, municipalities, and affordable housing initiatives while promising to do something about all of those.

Points Covered

He froze aid to schools

Challenged school boards.

Wants to change arbitration rules for public workers

Requests public-private salary and benefits parity

Demands pension reform

Property tax hikes not an option



Wants to get rid of programs like COAH

Is not thinking about the next election

15,000 Layoffs Coming In San Francisco

As many as 15,000 unionized city workers are anticipating layoffs on Friday in part of a work-week reduction plan in which most of them will be re-hired at reduced, 37.5-hour weeks.



The 3,000-strong Local 21, meanwhile, claims that such a forced work week reduction would be a violation of their contract -- though labor says the City Attorney disagrees. Vallejo promised "We'll lawyer up" if members are dismissed as part of the 37.5-hour scheme.

..As we can see from the desperate economic and fiscal woes of California, New Jersey, New York and other states with dominant public unions; this has become a major problem for the U.S. economy and smaller “d” democratic governance. The agenda for American political reform needs to include the breaking of public unions' power to capture an even larger share of private income.

Services Employment





Employment activity in the non-manufacturing sector contracted in February for the 26th consecutive month. ISM's Non-Manufacturing Employment Index for February registered 48.6 percent. This reflects an increase of 4 percentage points when compared to the seasonally adjusted 44.6 percent registered in January.



Two industries reported increased employment, nine industries reported decreased employment, and seven industries reported unchanged employment compared to January.



The industries reporting an increase in employment in February are: Retail Trade; and Transportation & Warehousing. The industries reporting a reduction in employment in February — listed in order — are: Educational Services; Real Estate, Rental & Leasing; Mining; Accommodation & Food Services; Utilities; Health Care & Social Assistance; Information; Public Administration; and Wholesale Trade.

Inventory Replenishment

Public Sector About To Play Catchup