LONDON • Non-manufacturing economic activity in the United States rose in September, beating expectations and building on momentum begun in August.
The Institute for Supply Management's index, released yesterday, registered 59.8 in September, beating estimates of 55.5 from economists.
This represents the highest reading for the service sector index so far since August 2005 when the index hit 61.3, according to ISM. In August this year, the index registered 55.3, a reversal from a decline in July.
September services Purchasing Managers' Index (PMI) was boosted mainly by a rise in production and new orders, despite the impact on the supply chain from the hurricanes. The new orders index registered 63.0, six points higher than in the previous month.
Service employment index rose to 56.8 last month from August's reading of 56.2. A reading above 50 for the index indicates expansion.
In the United Kingdom, services activity unexpectedly accelerated in September and price pressures increased, according to a report by IHS Markit released yesterday.
Markit said its industry surveys also suggest a 0.3 per cent expansion last quarter. The services PMI increased to 53.6 last month from 53.2 in August from a forecast of 53.2. Input costs advanced at the fastest pace in seven months.
59.8 US services PMI for September.
56.8 Service employment index last month.
The survey also showed that growth in new business fell to the weakest in more than a year and confidence declined. Some firms said that clients were holding off on major investment decisions because of Brexit uncertainty.
The report paints a mixed picture for the Bank of England, where policymakers have turned hawkish and indicated they may be close to raising interest rates.
While the pace of economic growth remains modest, a build-up of inflationary pressures is raising concern at the central bank.