Services Shrink, Jobless Claims Rise

The services sector contracted in March by the most since October 2001, and jobless claims last week were the highest in almost a year.

The Institute for Supply Management’s index for retail, financial services, construction and other nonmanufacturing businesses fell to 47.9 last month from 53.9 in February. A reading below 50 indicates contraction.

The Labor Department said initial claims for jobless benefits rose by 38,000 to 445,000 last week, a sign that today’s monthly jobs report may be weaker than forecast.