Economic activity in the non-manufacturing sector grew in October for the 34th consecutive month.
While the Institute for Supply Management reported that employment improved to its highest level in seven months during October, the pace of growth in the United States service sector slowed slightly.
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According to the industry report, the service index fell from 55.1 percent in September to 54.2 percent last month, missing analysts’ expectations of 54.5 percent. Even though a reading above 50 percent indicates expansion in the sector, October was the first month since June in which the rate of growth in service sector has declined. Its counterpart, the manufacturing sector, contracted during July and August as concerns about the strength of the manufacturing rebound grew.
New Orders, a forward-looking gauge of service sector, contributed to the slowing growth in the sector as a whole. The segment grew in October for the 39th consecutive month; yet, the index registered 54.8 percent, a decrease of 2.9 percentage points from the 57.7 percent recorded in September.
The report’s respondents, purchasing and supply executives from across the nation, indicated that the U.S. economy was growing moderately, with “business is steady” and “outlook is positive yet still guarded” as the most common responses.
Following the report’s release, financial markets in the United States showed little reaction.
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