Home / Markets / Economy
Thursday, July 03, 2008
Services Sector Makes Surprising Decline in June
Associated Press
NEW YORK--The nation's services sector declined unexpectedly in June after two months of growth, as new orders fell sharply and oil prices took their toll on businesses.
The Institute for Supply Management said Thursday that the services sector reading fell to 48.2 in June from 51.7 in May. It missed economists' prediction of a reading of 51.0, according to the consensus estimate of Wall Street economists surveyed by Thomson Financial/IFR. A reading above 50 signals growth.
The sector had been growing modestly, while much of the rest of the economy stalled. June's decline in the sector, coupled with Thursday's employment report showing the sixth straight month of job losses, added to the recent streak of bad news about the economy.
Bruce Kane, a Smithtown, N.Y. home accessories manufacturers rep, said stores he sells to are afraid to place orders for Christmas. "Come September, with home heating oil prices, they don't know what the customer is going to do," he said.
The Dow Jones industrial average, which has declined more than 20 percent since its October highs, rose in morning trading, up 30.77 to 11,246.28. Broader indexes were slightly lower, with the Standard & Poor's 500 down 0.39 to 1,261.13 and the Nasdaq composite down 4.08 to 2,247.38.
Fox Business Video
-
-
Banks Expecting Impressive Ear...
-
Jul 10, 2009
What are banks expecting for 2Q earnings?
-
-
-
CME Head on Oil Speculation
-
Jul 10, 2009
Duffy on Oil Speculation
-
-
-
Small Biz Against Cap and Trade
-
Jul 10, 2009
McArthur on Cap and Trade
-
-
-
Power Rankings: Google vs. Mic...
-
Jul 9, 2009
07/09/09
-
-
-
Cyber Attacks Continue
-
Jul 9, 2009
Strang on Cyber Attacks
-
FOX Translator
No data currently available.
No data currently available.
Most folks judge the health of a business by the revenue that comes in through sales. But not all revenue is equal. Companies can grow their sales by buying other companies, which means you don't get a clear view of how the real sales trends are moving.
So, many analysts, particularly those who look at retail, try to gauge what¿s known as "organic" growth, by looking at same-store sales. These are sales only at outlets open more than a year, so the metric can exclude any sales jump that comes from opening new locations. Retailers release same-store sales (which are frequently called "comps" since they're a true comparison from the previous period) every month.
Retail, incidentally, isn't the only industry to look at same-store sales. Hospital companies, also use the metric, to gauge how existing hospitals are performing compared to ones they just built or acquired.
