Services Sector Still Strong, But Less Than August

Service sector growth has been strong this month but a little less strong than August, based on Markit's sample where the headline index came in well above breakeven 50 at 58.5 vs 59.5 in final August and the same 58.5 for flash August. According to the text of the report, income orders are showing one of their sharpest increases in the five-year history of the report. Growth in backlog orders is also at a survey best. Also a plus is job creation which is at its best rate since June. The outlook for business activity is also strong, also at its best level since June. Price data show increases for salaries and food along with traction for final goods. Though this report, where details are not released to the public, offers no explanation for the slowing headline number in September, it nevertheless should confirm confidence in the general economic outlook.

The Markit PMI services index finished August at 59.5, up 1.0 point from the mid-month flash but down 1.3 points from July. Details of the report are not offered to the public but the general description was upbeat, citing strength in business activity and employment. The report also noted that cost inflation increased in August from a 15-month low in July.