Service Sector Expands In October
Includes Finance And Health Care Markets
Despite the federal shutdown, U.S. service sector business activity picked up moderately in October and firms took on additional workers, according to a new report by the Institute for Supply Management (ISM). The Institute's closely-watched services-related index rose one point to 55.4 last month, indicating growth in the sector.
"Respondents' comments are mixed with the majority reflecting an uptick in business," said Anthony Nieves, who leads the ISM survey.
The ISM's production index also increased to 59.7, up from 55.1 a month earlier and its employment gauge, which measures staff levels, improved to 56.2, a 3.5 point jump. The ISM's new-orders index slipped to 56.8% from 59.6%, however, showing stress from economic uncertainty. Still, 12 of the 18 industries tracked by ISM reported growth last month, a slight uptick from 11 in September.
Conditions in the service sector are viewed as among the most crucial metrics regarding the state of U.S. employment. The sector, which includes the finance and health care markets, employs 80% of U.S. workers. The October services data – which easily beat the forecasts of analysts – comes just days after ISM's national factory index showed U.S. manufacturing grew at its fastest pace last month in more than two years.