U.S. non-manufacturing sector’s growth unexpectedly accelerates in September - ISM

The Institute for Supply Management (ISM) reported on Tuesday that its non-manufacturing index (NMI) came in at 61.9 in September, which was 0.2 percentage point higher than an unrevised August’s reading of 61.7 percent. The latest reading pointed to the growth in the services sector for the 16th straight month.

Economists forecast the index to decrease to 60.0 last month. A reading above 50 signals expansion, while a reading below 50 indicates contraction.

Of the 18 services industries, 17 reported gains last month, the ISM said, even though challenges with labor resources, logistics, and materials continued affecting the continuity of supply.

According to the report, the ISM’s non-manufacturing Production measure rose 2.2 percentage points to 62.3 percent from the August reading and its New Orders gauge edged up 0.3 percentage point to 63.5 percent. At the same time, the Employment indicator went down 0.7 percentage point to 53.0 percent, while the Supplier Deliveries index fell 0.8 percentage point to 68.8 percent and the Inventories indicator also decreased 0.8 percentage point to 46.1 percent. On the price front, the Prices index increased 2.1 percentage points to 77.5 percent.

Commenting on the data, the Chair of the ISM Services Business Survey Committee, Anthony Nieves, noted, “The past relationship between the Services PMI and the overall economy indicates that the Services PM for September (61.9 percent) corresponds to a 4.5-percent increase in real gross domestic product (GDP) on an annualized basis."