A closely watched indicator of the health of the US economy has fallen back to moderate levels after rocketing over summer, but the figures also show robust strengthening in the jobs market.
The Institute for Supply Management’s (ISM) purchasing managers’ index (PMI) for non-manufacturing sectors dropped to a score of 56 for figures released this afternoon show, indicating slower growth in the service sector than in August.
The PMI had shot up to a 10-year high 60.3 in July and stayed buoyant at 59 in August.
However, the figure remains well above the 50 no-change mark as is consistent with decent service sector growth.
The survey also shows a strengthening in the jobs market, with the employment index rising to 58.3 from 56.
“That puts it at a level normally consistent with monthly gains in private services payrolls of more than 300,000, which is obviously well above the actual gains of 122,000 in August and 131,000 in September,” said economist Paul Ashworth from Capital Economics.
“That supports our view we will see a re-acceleration in payroll growth over the next few months. But we don’t anticipate that the employment figures will improve rapidly enough for the Fed to raise rates before the end of this year.”
A separate service sector survey released today by Markit also showed job creation continuing at a “robust pace” last month, despite overall business activity growing at a slightly slower pace.