The U.S. services sector expanded at a slower pace than anticipated in September, with the Institute for Supply Management’s non-manufacturing purchasing managers’ index coming in at 56.5, below the 56.8 forecast and down from 54.6 in August.
The reading, based on responses from more than 400 executives across transport, communications, financial services, business and personal services, computing and IT, and hospitality, still points to growth as any figure above 50 indicates expansion. The deceleration follows a rebound in August, when the index rose from 52.6 in July to 54.6.
The services sector accounts for the majority of U.S. economic output and employment, making the PMI a closely watched indicator of broader economic momentum. A stronger-than-expected reading typically supports the U.S. dollar, while a miss can weigh on sentiment toward the recovery. The latest miss relative to expectations may temper optimism about the durability of the expansion.
