A monthly gauge of service-sector activity rebounded in September from its weakest level in six years.
The Institute of Supply Management’s purchasing manager’s index (PMI) jumped to 57.1 after falling to the lowest level in six years in August.
The PMI is based on a survey of executives in the service sector, and it takes the pulse of various aspects of their businesses including new orders, inventories, and employment.
The index was estimated at 53. According to Bespoke Investment Group, the difference between the index and what economists expected was the biggest since July 2015 and tied for the largest of the expansion.
Some of the commentary from the people ISM surveyed included higher-than-anticipated sales, and concern about labour costs.
Separately, Markit Economics’ PMI rose to 52.3 in September, up from a preliminary reading of 51.9.
The firm found that the pace of job creation slowed to the worst level in nearly four years, as employers eased hiring because there was not as much new work.
“Coming hard on the heels of the IMF’s downgrade to the US economic outlook, the upturn in the PMI is a welcome development and suggests that the pace of economic growth gained some momentum in September,” said Chris Williamson, chief business economist at IHS Markit.
“However, take a longer look and it’s clear that this is by no means a robust upturn.”
Respondents to Markit’s survey continued to hope that client spending picks up after the uncertainty surrounding the elections passes in November.
In both cases, readings above 50 indicate that the service sector remained in expansionary territory.
The service sector creates most of America’s jobs and is responsible for most economic output, which is why it is closely watched by economists.