- Prelim services were 53.9
- Prior services were 54.5
- Composite index 53.9 vs 53.6 prelim
- Despite evidence of ongoing capacity pressures – backlogs of work rose solidly for a seventh successive month in September – slightly softer rates of demand and activity growth led to some reluctance amongst US service companies to add to their staffing levels
The ISM services data is due at the top of the hour.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence
“Service sector growth softened slightly in September but remained strong enough to round off an impressive performance over the third quarter a whole. Combined with sustained growth in the manufacturing sector, the expansion of service sector activity is indicative of robust third quarter annualized GDP growth of around 2.5%.
“Growth is being fueled principally by rising financial services and tech sector activity, though we are also seeing more signs of improving demand for consumer-facing services such as leisure and recreation, likely linked in part to lower interest rates. Lower borrowing costs have also fed through to a broad- based improvement in business optimism about the outlook for the next 12 months.
“Disappointingly, the improvement in business optimism failed to spur more jobs growth, with hiring almost stalling in a sign of further labor market malaise as companies often focused on running more efficiently amid uncertain trading conditions.
“A further ongoing source of concern from the surveys are heightened cost pressures which survey respondents have attributed to tariffs. Input costs rose sharply again in September as import levies were seen to have again fed through from goods to services. However, rates charged for services rose at the slowest rate for five months in a welcome sign that some of these tariff price pressures in supply chains are starting to moderate.”
There are some good signs here.
