Financial News: U.S. Service Sector Activity Unchanged In September

U.S. Service Sector Activity Unchanged In September

10/03/2025 - 10:48:00 (RTTNews)

(RTTNews) - Service sector activity in the U.S. was unchanged in the month of September, the Institute for Supply Management revealed in a report released on Friday.

The ISM said its services PMI fell to 50.0 in September from 52.0 in August, with a reading of 50.0 serving as the breakeven point between expansion and contraction. Economists had expected the index to edge down to 51.7.

The bigger than expected decrease by the headline index partly reflected a downturn by business activity, as the business activity index slumped to 49.9 in September from 55.0 in August. The index entered contraction territory for the first time since May 2020.

The new orders index also tumbled to 50.4 in September from 56.0 in August, while the employment index crept up to 47.2 in September from 46.5 in August but remained in contraction territory for the fourth month in a row.

Meanwhile, the report said the backlog of orders index surged to 47.3 in September from 40.4 in August, still indicating contraction but reaching its highest reading since April.

The supplier deliveries index also rose to 52.6 in September from 50.3 in August, with the ISM noting a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.

"September's Services PMI level returned to numbers very similar to May and July, with weakness in business activity and continued weakness in employment," said Steve Miller, Chair of the ISM Services Business Survey Committee.

He added, "Commentary in general indicated moderate or weak growth, with more isolated observations of supplier delivery challenges."

A separate report released by the ISM on Wednesday showed its reading on U.S. manufacturing activity crept slightly higher in September but continued to indicate contraction.

The ISM said its manufacturing PMI edged up to 49.1 in September from 48.7 in August, although a reading below 50 still indicates contraction. Economists had expected the index to inch up to 49.0.

With the slightly bigger than expected increase, the manufacturing PMI reached its highest level since hitting 50.3 in February.

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