US Services Activity Expands at Fastest Pace in Eight Months
US services activity expanded in October at the fastest pace in eight months on a swift upturn in the growth of new orders.
The Institute for Supply Management’s index of services rose 2.4 points last month to 52.4, the group said Wednesday. Readings above 50 indicate expansion in the largest part of the economy.
The orders index jumped 5.8 points to a one-year high of 56.2. The business activity index, which parallels the ISM's factory output gauge, swung back into expansion territory having advanced 4.4 points to 54.3.
The rebound in demand was also accompanied by more pronounced inflationary pressures. The group's prices-paid index rose to a three-year high of 70, indicating the services economy is bearing a bigger brunt of higher US import duties.
However, there may be scope for some relief in coming months. The ISM's manufacturing report on Monday suggested price pressures continued to ease for producers, a trend that may eventually trickle down to services providers.
The services report also showed employment is starting to stabilize. The group's index climbed to a five-month high of 48.2, indicating employment shrank but at a slower pace.
Inventories barely contracted in October and a larger share of service providers continued to see their stockpiles as too high relative to business activity.
Source : Bloomberg.com
