US services activity slows in October - ISM
Activity in the US services sector slowed a little in October, according to data released on Wednesday.
The Institute for Supply Management’s services index fell to 56.6 from 57.8 in September, coming in below expectations for a reading of 57.5.
The business activity index declined to 61.2 in October from 63.0 the month before, while the new orders index printed at 58.8, down from 61.5. The employment gauge dipped to 50.1 from 51.8 and the prices index rose to 63.9 from 59.0.
Capital Economics said the slight dip in the ISM services index is perhaps an early sign that the mounting third wave of Covid-19 cases is starting to weigh on consumption.
"That remains the biggest downside risk to the economy over the next few months regardless of who is President on January 20th.
"The slight drop in the ISM services index (formerly known as the non-manufacturing index) comes in contrast to the sharp rise in the counterpart manufacturing index for October, released on Monday. But that divergence makes sense given how far production has lagged consumption and given that discretionary services were always going to be hit first as coronavirus worries began to re-emerge."
Senior US economist Michael Pearce noted that weakness was fairly broad-based and said this adds to the signal from the ADP report released earlier that the official non-farm payroll figures due out on Friday will show a further slowdown in employment growth last month.