US Services Sector Index Surges to Highest Level in 12 Years

The US services sector continued to grow in September with the ISM Non-Manufacturing Composite index topping analysts’ expectations to hit the highest level since August 2005.

The measure came in at 59.8 for last month against the anticipated 55.5. The August reading was 55.3. The Employment Index increased 56.8 from the August measure of 56.2, though there were regional impacts from recent hurricanes, according to ISM.

Weather impacts are also indicated in regional supply chains, though the wider economy appears largely unaffected, the institute said.

The non-manufacturing business activity index increased to 61.3, higher than the August reading of 57.5 and reflecting growth for the 98th consecutive month. New orders registered 63, up from 57.1 in August. The prices index jumped to 66.3 from the August reading of 57.9, the highest reading since February 2012.

The ISM data followed the release of the IHS Markit US Services Business Activity Index which registered 55.3 in September, down slightly from 56 in August. The report showed employment growth in the service sector was “solid” in September, although it eased to a three-month low.

“Given the disruption caused by recent hurricanes, some pull-back in business activity was understandable, so the resilient reading of the September services PMI makes for encouraging reading,” said Chris Williamson, chief business economist at IHS Markit in a release.

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