U.S. Service Sector Growth Unexpectedly Accelerates In October
November 03 2017 - 5:31AM
RTTF2
Activity in the U.S. service sector unexpectedly grew at a
faster rate in the month of October, according to a report released
by the Institute for Supply Management on Friday.
The ISM said its non-manufacturing index inched up to 60.1 in
October from 59.8 in September, with a reading above 50 indicating
growth in the service sector. Economists had expected the index to
drop to 58.6.
With the increase, the NMI reached its highest level since the
index's debut in 2008. The highest reading among pre-2008 composite
index calculations was 61.3 percent in August of 2005.
"The non-manufacturing sector has reflected the third
consecutive month of strong growth," Anthony Nieves, Chair of the
ISM Non-Manufacturing Business Survey Committee.
He added, "Respondent comments continue to indicate a positive
outlook for business conditions, and the economy as we begin the
fourth quarter."
The uptick by the headline index came as the business activity
index rose to 62.2 in October from 61.3 in September.
The employment index also crept up 62.8 in October from 63.0 in
September, indicating a modest acceleration in the pace of job
growth in the service sector.
On the inflation front, the prices index dropped to 62.7 in
October from 66.3 in September, suggesting a slowdown in the pace
of price growth.
The ISM released a separate report on Wednesday showing a
slowdown in the pace of growth in U.S. manufacturing activity in
the month of October.
The purchasing managers index fell to 58.7 in October from 60.8
in September. Economists had expected the index to edge down to
59.5.
The bigger than expected pullback by the manufacturing index
came after it jumped to its highest level in over thirteen years in
the previous month.
"Overall, the continued strength of the business surveys
illustrates that the pick-up in GDP growth over the past couple of
quarters has been no fluke, and supports our view that the economy
will continue growing at a healthy pace over the coming quarters as
well," said Andrew Hunter, U.S. Economist at Capital Economics.
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