The ISM services PMI fell to 54.9 in September from 55.4 in August, while the prices-paid measure rose to 74.0 from 72.6. The survey also showed slower supplier deliveries and an increase in services employment.
The Institute for Supply Management said its nonmanufacturing Purchasing Managers’ Index fell to 54.9 in September from 55.4 in August, above the 50 level that indicates growth. New orders eased to 59.8 from 60.9 in August, while services employment rose to 50.1 from 47.8.
The supplier deliveries index increased to 53.2 from 51.3, indicating slower deliveries for a 22nd consecutive month. Prices paid by businesses for services inputs jumped to 74.0 from 72.6.
The article said strong demand was stretching supply chains and raising input costs, with the Middle East conflict contributing to higher energy prices and shortages of commodities shipped through the Strait of Hormuz. The combined ISM services and manufacturing surveys pointed to higher inflation ahead and supported economists’ expectations of a Federal Reserve rate increase in December.
