Slowdown for growth in US service sector

 
Julian Harris
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THE PACE of expansion in the US services sector slowed in October, figures revealed yesterday, depriving President Barack Obama of a timely boost to his campaign for re-election.

The Institute of Supply Management (ISM) non-manufacturing report’s headline index came in at 54.2 last month compared to 55.1 in September, disappointing economists.

With any reading above 50 indicating economic expansion in the sector, the number reflected a 34th consecutive month of growth.

The index contained fuel for bears, nonetheless, and was the first time since June that the measure had revealed a slowdown in the sector’s expansion.

“Worryingly, the main indicators of activity and demand fell particularly sharply, with the resulting drop in the composite PMI softened by an improvement in the employment index,” said Chris Williamson of Markit.

“The concern is that, unless growth of new business picks up, the employment numbers could fade again in coming months.”

The forward-looking new orders gauge fell to 54.8 from 57.7, while the measure of employment gained to 54.9 from 51.1. Business activity fell from 59.9 to 55.4.