U.S. services activity grows in September

The main US services sector saw its economic activity expand for the third straight month in September, according to survey data released yesterday (October 3), as new orders rebounded.

This growth comes weeks before the presidential election in November, as companies monitor the results of the race for the White House while solidifying their plans for 2025 and beyond.

The Institute for Supply Management (ISM) Services Index rose to 54.9% in September, higher than analysts expected and up from 51.5% in August. This is also the highest reading since February 2023, ISM said.

Summarying.com noted that consensus estimates expected an increase to just 51.6%, although that would still be above the 50% level that separates growth from contraction.

The increase is due to an increase in the business activity index by 6.6 percentage points and an increase in the new orders index by 6.4 percentage points. However, the employment index contracted for the first time in three months, according to the Institute for Supply Management.

“Concerns about political uncertainty are more widespread than last month,” noted Steve Miller, head of ISM Polling.

He added that one participant also expressed concern about potential labor problems at the port.

“Despite the increase in September, sentiment is still weighing on the index,” said Matthew Martin, an economist at Oxford Economics.

However, he said there was still “a lot of room for improvement once the political uncertainty dissipates,” adding that the latest report is a sign that the economy “continues to expand at a rapid pace.”