The pace of expansion in the vast US services sector cooled more than economists forecast in October, as employment growth slowed and price gains picked up steam.
The Institute for Supply Management’s non-manufacturing purchasing managers index clocked in at 54.8 last month, from 57.1 in September. Wall Street economists expected a shallower fall to 56.
The decline in the index, which still remains well above the 50 line separating expansion from contraction, came as business activity, new orders and employment growth all cooled.
Importantly, the rate of price rises also increased, the latest sign that inflation pressure has begun to mount.
The services sector makes up the bulk of US employment.