U.S. services sector activity slowed to a three-year low in September amid risin...
WASHINGTON - U.S. services sector activity slowed to a three-year low in September amid rising concerns about tariffs, suggesting that trade tensions were spilling over to the broader economy.
The ISM said its non-manufacturing activity index fell to a reading of 52.6 in September, the lowest since August 2016, from 56.4 in August. A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of U.S. economic activity. Economists polled by Reuters had forecast the index falling to 55.1 in September.
September’s drop in services sector activity reflected declines in measures of production and new orders, which tumbled 6.6 points to a reading of 53.7, a three-year low. But order backlogs increased as did new bookings for exports, offering hope that activity in the sector could rebound. According to a Reuters survey of economists, nonfarm payrolls probably increased by 145,000 jobs last month after rising by 130,000 in August. Job gains have averaged 158,000 per month this year, still above the roughly 100,000 needed each month to keep up with growth in the working-age population.SOLID LABOR MARKET“Yes, the economy is slowing,” said Joel Naroff, chief economist at Naroff Economic Advisors, in Holland, Pennsylvania.
In a separate report on Thursday, the Labor Department said initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 219,000 for the week ended Sept. 28.
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