The U.S. services sector climbed in September as the non-manufacturing business activity composite index was 57.1 in the month, compared to 55.5 in August, on a seasonally adjusted basis, the Institute for Supply Management reported Wednesday.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
Economists polled by Thomson Reuters had expected a 53.0 level.
The prices paid index rose to 54.0 from 51.8.
The employment index soared to 57.2 from 50.7.
The business activity/production index grew to 60.3 from 51.8, the new orders index was at 60.0, up from 51.4; backlog of orders increased to 52.0 from 49.5; new export orders jumped to 56.5 from 46.5; inventories gained to 51.5 from 48.0; inventory sentiment crept to 64.5 from 64.0; the supplier deliveries index dipped to 51.0 from 51.5; and imports increased to 51.0 from 50.5.
Members' general comments on business in the month included:
- "Somewhat flat month of overall pricing conditions; however, labor cost and availability remains a concern." (Accommodation & Food Services)
- "Business is showing a moderate unexpected uptick over last month. YTD business volume is moderately under forecast." (Management of Companies & Support Services)
- "Macroeconomic issues like Brexit and reduced travel from South America impact summer travel." (Arts, Entertainment & Recreation)
- "Sales ahead of plan. Net income below plan. Costs running higher than plan. In addition, continued low interest rates impact investment results." (Finance & Insurance)
- "Affordable Care Act, changes in Medicare and Medicaid causing problems across much of the healthcare and insurance industries. Acquisition helping our company, but also lost a large client that will impact our financials for the next year." (Health Care & Social Assistance)
- "Solid steady growth." (Professional, Scientific & Technical Services)
- "Business is [at] an annual high." (Public Administration)
- "Sales continue [at an] increased pace from last month." (Retail Trade)
- "We are watching the effects of the Hanjin Shipping issues with regard to cost and availability of Asian imports." (Wholesale Trade)
