By Shobhana Chandra April 5 (Bloomberg) -- Service industries probably expanded in March at the fastest pace since 2007, a sign of a broadening U.S. recovery that’s starting to create jobs, economists said before reports today. The Institute for Supply Management’s index of non- manufacturing businesses, which make up about 90 percent of the economy, rose to 54, according to the median estimate of 63 economists surveyed by Bloomberg News. Fewer Americans signed contracts to buy homes in February, another report may show, indicating housing remains the economy’s weak spot. The manufacturing rebound that helped the U.S. emerge from the worst recession since the 1930s is propelling other parts of the economy, benefiting companies such as Carnival Corp. and Best Buy Inc. A government report last week showed employment rose 162,000 in March, the most in three years, making a sustained recovery more likely. “Strength in the manufacturing base has begun to spread to services industries,” said Lindsey Piegza, an economist at FTN Financial in New York. This is “a much-needed transition for employment growth.” The Tempe, Arizona-based group’s figures are due at 10 a.m. New York time. Estimates in the Bloomberg survey ranged from 51 to 55. Readings above 50 signal expansion. Also at 10 a.m., a report from the National Association of Realtors in Washington may show its index of purchase agreements, or pending home sales, fell 1 percent in February after a 7.6 percent drop the prior month, according to the survey median. Estimates ranged from a decline of 3.5 percent to a gain of 5.6 percent. Unemployment Rate The unemployment rate was 9.7 percent in March for a third month, the Labor Department reported April 2. Payrolls rose for the third time in the past five months and by the most since March 2007, signaling companies are becoming more confident that the economy is healing. Reflecting the improvement in the services industry, the Standard & Poor’s Supercomposite Retailing Index has climbed 11 percent this year, outpacing a 5.6 percent gain in the broader S&P 500 gauge. Best Buy, the largest U.S. electronics retailer, is among companies seeing a pickup in demand. The Richfield, Minnesota- based merchant last month reported fourth-quarter profit that exceeded analysts’ estimates as discounts helped to boost sales. Carnival, the biggest cruise-line operator, last month raised its full-year profit forecast as ticket prices rebounded from 2009’s lows amid more bookings. “The booking environment continued to improve,” Chief Executive Officer Micky Arison said in a March 23 statement. “We returned to top line revenue growth after a challenging 2009.” Bloomberg Survey ================================================================ ISM Non- Pending Manu Homes Index MOM% ================================================================ Date of Release 04/05 04/05 Observation Period March Feb. ---------------------------------------------------------------- Median 54.0 -1.0% Average 53.7 -0.3% High Forecast 55.0 5.6% Low Forecast 51.0 -3.5% Number of Participants 63 29 Previous 53.0 -7.6% ---------------------------------------------------------------- 4CAST Ltd. 53.5 0.4% Action Economics 53.0 0.7% Aletti Gestielle SGR 53.5 --- Ameriprise Financial Inc 54.0 -1.0% Bank of Tokyo- Mitsubishi 55.0 --- Bantleon Bank AG 54.0 --- Barclays Capital 53.0 -1.0% BMO Capital Markets 54.0 -1.5% BNP Paribas 53.5 --- BofA Merrill Lynch Resear 54.0 --- Briefing.com 52.1 -2.5% CIBC World Markets 54.0 --- Citi 54.0 --- ClearView Economics 54.0 1.0% Commerzbank AG 54.0 -2.0% Credit Suisse 55.0 --- Daiwa Securities America 54.0 --- Danske Bank 53.4 --- Desjardins Group 54.0 --- Deutsche Bank Securities 54.0 -2.0% Deutsche Postbank AG 54.0 --- DZ Bank 53.5 --- First Trust Advisors 53.8 --- Fortis 54.0 -1.5% FTN Financial 54.0 --- IDEAglobal 54.0 -1.5% IHS Global Insight 54.5 --- Informa Global Markets 54.0 1.1% ING Financial Markets 54.0 -1.5% Insight Economics 54.0 -3.5% Intesa-SanPaulo 54.0 --- J.P. Morgan Chase 53.5 3.0% Janney Montgomery Scott L 52.3 0.0% Jefferies & Co. 51.0 --- Johnson Illington Advisor 54.0 --- Landesbank Berlin 52.0 --- Maria Fiorini Ramirez Inc 53.5 --- Moody’s Economy.com 52.5 1.0% National Bank Financial 54.5 --- Natixis 53.6 --- Nomura Securities Intl. 54.0 --- Nord/LB 53.0 --- PNC Bank 54.0 --- Prestige Economics 51.0 --- Raiffeisen Zentralbank --- 1.0% Raymond James 54.0 --- RBC Capital Markets 54.0 --- RBS Securities Inc. 53.5 --- Ried, Thunberg & Co. 53.5 1.0% Schneider Foreign Exchang 54.2 1.3% Scotia Capital 54.0 --- Societe Generale 54.0 --- Standard Chartered 53.5 -1.0% State Street Global Marke 54.2 -2.1% Stone & McCarthy Research 53.0 --- TD Securities 54.0 -2.0% Thomson Reuters/IFR 53.8 -1.5% UBS 54.0 0.0% UniCredit Research 54.0 --- University of Maryland 53.5 1.8% Wells Fargo & Co. 53.5 --- Westpac Banking Co. 53.5 -3.0% Woodley Park Research 54.6 5.6% Wrightson Associates 53.5 1.0% ================================================================ To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

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