Growth In Service Sector Slows Slightly

Growth in the services PMI slowed but only slightly in the September flash, down 5 tenths to 55.6 and very near the Econoday consensus for 55.5. The report cites solid domestic conditions especially for consumer-focused service providers. New orders, however, did slow for a second month and are at their lowest growth rate since January. With new orders lacking, service providers worked down backlogs for the third time in the last four months. The report continues to describe hiring as "robust", at least in comparison to the recovery average. Respondents are still optimistic on the outlook though the second fewest percentage, since June 2012, see business activity rising. Like most September surveys, both input and output prices are in contraction. This report is solid but not gangbusters, hinting that conditions, though healthy, may be slowing going into year end.

Recent History Of This Indicator: Strength in the service sector is central to the nation's economic health and another solid reading is expected for the services PMI where, showing strong gains for new orders and employment, global effects have been hard to find. The flash reading for September is expected to edge 3 tenths higher to 55.5 to signal strong monthly growth.