US Service Sector Activity Accelerates to More Than 2-Year High

• U.S. services sector activity unexpectedly accelerated in October to a more-than two-year high, and employment strengthened, giving more evidence that the economy is in solid shape as the nation headed to the polls to pick the next president.
• The Institute for Supply Management (ISM) said on Tuesday that its nonmanufacturing purchasing managers (PMI) index accelerated to 56.0 last month from 54.9 the prior month. It was the highest level since August 2022. Economists polled by Reuters had forecast the services PMI declining to 53.8.
• A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy. The ISM views PMI readings above 49 over time as generally indicating an expansion of the overall economy.
• The ISM survey's new orders measure eased to 57.4 in October from 59.4 in September. The ISM's prices paid measure for services inputs ticked down to 58.1 from the prior month's eight-month high of 59.4.
• ISM's measure of services employment rose to 53.0 in October, up from 48.1 in September, a signal of strengthening job growth. The reading appears at odds with last Friday's Labor Department report showing employers sharply slowed hiring last month, adding just 12,000 jobs.
• However, the report was widely seen as overstating job market weakness, given an ongoing Boeing strike that hammered manufacturing jobs and a pair of hurricanes that kept more than half a million people from work.

(Source: Reuters)