U.S. Service Sector Reaches 8-Month Peak in October

US Service Activity Records Largest Increase in 8 Months

The US ISM (Institute for Supply Management) has released the service sector PMI data for October. According to the data, the service sector PMI index increased by 2.4 points in October compared to the previous month, reaching a value of 52.4. This value exceeded market expectations, which were at the level of 50.7.

Signs of Growth in the Sector

The increase in October indicates that growth is occurring in the sector. In the previous month -September- the PMI index remained stable at the 50 level. Let’s take a look at the details of this growth in the service sector, one of the cornerstones of the economy:

• Production index: Increased by 4.4 points on a monthly basis, reaching 54.3.
• New orders: Reached a value of 56.2 with an increase of 5.8 points.
• Employment index: Recorded at 48.2, an increase of 1 point.

While growth was observed in 11 sub-sectors of the service sector, only 6 sub-sectors recorded a contraction. The sectors that recorded growth include:

• Accommodation and food services
• Retail trade
• Wholesale trade
• Real estate and rental
• Health services
• Transportation and warehousing

On the other hand, sectors such as arts, entertainment and recreation, and finance and insurance experienced contraction.

S&P Global Service Sector Data

Additionally, S&P Global also released the final service sector PMI data for October. The service sector PMI increased by 0.6 points in October, rising to 54.8. The previous preliminary data was recorded as 55.2. In September, the PMI value was noted as 54.2.

The composite PMI, which includes manufacturing and service sectors, also rose by 0.7 points in October, reaching a value of 54.6. This value exceeded market expectations.

In summary, ISM and PMI values above 50 indicate expansion, while values below 50 indicate contraction.