US service providers slowed in September
According to the ISM survey, the Purchasing Managers’ Index for service providers fell to 53.6 points from 54.5 points in August.
Consumer prices rose 3.7% in August.
Image: Gene J. Busker/Keystone
Business in US service providers lost momentum in September. According to the ISM survey released on Wednesday, the Purchasing Managers’ Index for the sector fell to 53.6 points from 54.5 points in August. Experts interviewed by Reuters expected this. Despite the decline, the services sector is still above the growth threshold of 50 points. The barometer for new orders fell to its lowest level since December.
As before, the ISM index is clearly in expansion territory and “regardless of the weakness in the manufacturing sector, the economy as a whole was on a growth path in the third quarter,” said Helaba expert Ralf Runde. “Federal-related interest rate expectations are unlikely to ease, especially as the employment component is also above expansionary range.”
The US Federal Reserve (Fed) is fighting high inflation with tight monetary policy. However, after some sharp interest rate hikes, the central bank left the key monetary policy rate at 5.25% to 5.50% two weeks ago. After the decision, Federal Reserve Chairman Jerome Powell made it clear that there was still room for improvement: “We are prepared to raise interest rates further if necessary.”
Despite the tight monetary policy of the US Federal Reserve (Fed), inflation in the US has been rising recently. Consumer prices rose 3.7% in August for the second month in a row, after 3.2% in July. However, the underlying inflation trend is downward.
Reuters
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