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Economic Report: U.S. service economy surges in March as vaccinations rise and restrictions are lifted

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The numbers: The large service side of the U.S. economy surged in March as governments lifted businesses restrictions and rising vaccinations gave Americans more confidence to go out and shop, travel or take a vacation.

A survey of business leaders at service-oriented firms such as banks, retailers and restaurants jumped to 63.7% last month from 55.3% in February, the Institute for Supply Management said Monday.

That’s the highest level on record since the ISM began the survey in 1997. It doesn’t mean service-oriented companies are doing better than ever, just that the improvement between February and March was especially strong.

Readings above 50% signal that businesses are expanding, and numbers above 55% are a sign of broad strength.

See: A visual look at how an unfair pandemic has reshaped work and home

What happened: New orders and production made big leaps in March as each index also hit the highest levels on record.

The gauge measuring new orders skyrocketed to 67.2% last month from 51.9% in February, when a bout of unusually severe winter weather in states such as Texas sapped the economy.

The production index also climbed nearly 14 points to 69.4%.

Employment also accelerated. The employment barometer jumped to 57.2% from 52.7% and reached a nearly two-year peak.

The chief worry remains an increase in prices tied to shortages of key supplies at a time when customer demand is rebounding in a big way. The price gauge moved up again to 74% from 71.8% and stayed at a 10-year high.

Big Picture: The economy is catching fire again as coronavirus cases decline, the weather warms, federal stimulus floods into the economy. The U.S. added the most jobs in March since last fall and hiring is likely to strong in the months ahead so long as the coronavirus is kept at bay.

Market reaction: In recent trades, the Dow Jones Industrial Average DJIA and S&P 500 SPX extended early gains.

Coronavirus Update: U.S. COVID vaccine program speeds up to about 3 million doses a day in the past week

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