U.S. services sector growth hits three-year low in September
The U.S. non-manufacturing sector in September expanded at a much slower pace than the previous month, hitting a three-year low, the Institute for Supply Management (ISM) said Thursday.
The non-manufacturing index (NMI), which gauges the performance of the services sector, registered 52.6 percent in September, down 3.8 percentage points from the August reading, according to the latest Non-Manufacturing ISM Report on Business. The July reading was 53.7 percent.
This is the lowest reading since August 2016, when the NMI registered 51.8 percent, the report showed.
"The respondents are mostly concerned about tariffs, labor resources and the direction of the economy," said Anthony Nieves, chair of ISM's non-manufacturing business survey committee.
A reading above 50 percent indicates that the non-manufacturing sector economy is generally expanding. "The past relationship between the NMI and the overall economy indicates that the NMI for September corresponds to a 1.4-percent increase in real gross domestic product (GDP) on an annualized basis," Nieves said.
According to data released by the ISM earlier this week, the purchasing managers' index (PMI), which gauges the performance of the manufacturing sector, fell to 47.8 percent in September, the lowest since June 2009. In the previous month, the PMI registered 49.1 percent, indicating contraction of U.S. manufacturing activities for the first time in three years.