WASHINGTON, D.C.: Activity in the US economy’s vast service sector cooled in September, with some businesses citing impacts from stock market turmoil and low commodity prices, a private survey showed Monday.
A sharp drop in new orders led the Institute for Supply Management’s non-manufacturing purchasing managers index lower, to 56.9 in September from 59.0 in August.
A reading above 50 indicates growth. The PMI reading on the service sector, which accounts for roughly 80 percent of US economic activity, fell for the second straight month in September but showed expansion for a 68th month.
“The trend of lower costs and little pricing power continues,” reflected in the drop in prices, the ISM said. “Overall, respondents continue to remain positive about current business conditions.”
Thirteen of the 18 industries surveyed reported growth, led by educational services and construction. Mining, suffering from low oil prices, led the four industries reporting contraction.
“Despite the larger-than-expected fall in the headline index, the details of the survey suggest service sector activity held up quite well through the end of the third quarter,” Barclays analyst Jesse Hurwitz said.