Financial News: U.S. Services Index Unexpectedly Climbs To Two-Year High

U.S. Services Index Unexpectedly Climbs To Two-Year High In October

11/05/2024 - 10:49:00 (RTTNews)

(RTTNews) - Service sector activity in the U.S. unexpectedly grew at an accelerated rate in the month of October, according to a report released by the Institute for Supply Management on Tuesday.

The ISM said its services PMI rose to 56.0 in October from 54.9 in September, with a reading above 50 indicating growth. The uptick surprised economists, who had expected the index to dip to 53.8.

With the unexpected increase, the ISM's services PMI reached its highest level since hitting 56.4 in July 2022.

The rise by the headline index partly reflected a turnaround by employment, as the employment index surged to 53.0 in October from 48.1 in September, reaching its highest level since hitting 54.1 in August 2023.

The ISM said the supplier deliveries index also jumped to 56.4 in October from 52.1 in September, with a reading above 50 indicating slower deliveries, which is typical as the economy improves and customer demand increases.

Meanwhile, the report said the business activity index tumbled to 57.2 in October from 59.9 in September, while the new orders index slumped to 57.4 in October from 59.3 in September.

The prices index also fell to 58.1 in October from 59.4 in September, indicating a slowdown by the pace of price growth.

A separate report released by the Institute for Supply Management last Friday showed U.S. manufacturing activity unexpectedly contracted at a modestly faster rate in the month of October.

The ISM said its manufacturing PMI fell to 46.5 in October from 47.2 in September, with a reading below 50 indicating contraction. Economists had expected the index to inch up to 47.6.

With the unexpected decrease, the manufacturing PMI dropped to its lowest level since hitting 46.5 in July 2023.

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