The U.S. services sector climbed in October as the non-manufacturing business activity composite index was 54.8 in the month, compared to 57.1 in September, on a seasonally adjusted basis, the Institute for Supply Management reported Thursday.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
Economists polled by Thomson Reuters had expected a 56.0 level.
The prices paid index rose to 56.6 from 54.0.
The employment index declined to 53.1 from 57.2.
The business activity/production index fell to 57.7 from 60.3, the new orders index was at 57.7, down from 60.0; backlog of orders remained at 52.0; new export orders dropped to 55.5 from 56.5; inventories gained to 52.0 from 51.5; inventory sentiment fell to 62.0 from 64.5; the supplier deliveries index dipped to 50.5 from 51.0; and imports increased to 53.0 from 51.0.
Members' general comments on business in the month included:
- "Food industry is reeling from high avocado pricing due to a labor dispute between packers and growers. We've seen case prices rise to as much as $100 for standard 48 count. Otherwise, commodities have remained as usual given the transition to seasonal growing regions." (Accommodation & Food Services)
- "We secured lots of new clients, and business in our division is booming." (Construction)
- "Slight decline for this time of year. Seeing price reductions as well." (Arts, Entertainment & Recreation)
- "Economy is becoming stabilized. All segments doing fairly well." (Finance & Insurance)
- "Uncertainty as to the ongoing status of the Affordable Care Act and the impact it is having on individual costs." (Health Care & Social Assistance)
- "There has been an overall stall in momentum as many clients begin to approach busy seasons." (Professional, Scientific & Technical Services)
- "Sales remain steady." (Retail Trade)
- "Increasing pressure to drive down cost of goods purchased." (Transportation & Warehousing)
- "Steady work continuing in fourth quarter." (Utilities)
