LATEST: ISM’s monthly report on the U.S. non-manufacturing sector is out.
The headline index fell to 54.4 in September from August’s 58.6 reading. Economists predicted a smaller drop to 57.0.
The figure indicates that the pace of growth in the American services sector slowed down significantly over the past month.
The business activity sub-index fell to 55.1 from 62.2, while the new orders sub-index fell to 59.6 from 60.5.
The employment sub-index dropped to 52.7 from 57.0.
One bright spot: the new export orders sub-index surged to 57.5 in September from August’s 50.5 reading.
Below are what respondents to the survey are saying:
- “Overall business conditions are slowing — small manpower decrease of 5 per cent.” (Construction)
- “Business levels continue to be strong. Shifting from transient to group travellers.” (Accommodation & Food Services)
- “Increased activity following summer vacations, but several postponements as well. Clients still unsure about the economy and business costs (e.g., healthcare).” (Professional, Scientific & Technical Services)
- “The federal government’s spending is increasing greatly as agencies execute their final budgets and utilise fiscal year 2013 appropriated funds prior to their expiration on September 30th. This has caused a major increase in procurement activity for goods and services. Budgets are uncertain for fiscal year 2014, so some items requiring funding in future years are not being purchased.” (Public Administration)
- “Business has leveled off — not much in the way of growth.” (Retail Trade)
- “Some pick-up in sequential sales growth, but still flat with last year.” (Wholesale Trade)
The headline index from ISM’s report on the manufacturing side of the economy, released Tuesday, unexpectedly rose to 56.2 from August’s 55.7 reading.
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