US labor market remains stable; services input price rises point to elevated inflation

An Institute for Supply Management survey showed a measure of prices paid by services businesses for inputs jumped to a three-year high in August, suggesting inflation was not confined to the goods sector.

The ISM's measure of new orders received by services businesses surged to 60.9, the highest since February 2023, from 57.2 in July. The nonmanufacturing Purchasing Managers' Index rose to 55.4 from 54.1.

Fed Governor Christopher Waller said at a Reuters NEXT Newsmaker event that he was inclined to argue in favor of keeping rates steady this month if upcoming data confirmed inflation pressures were cooling off.

"The latest surveys offer support for the idea that the Fed will soon raise interest rates," said Stephen Brown, chief North America economist at Capital Economics. "Nonetheless, as Governor Christopher Waller said earlier today, such a decision will still be based almost entirely on the forthcoming CPI and PPI data."