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Services sector expands slightly in October

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Services sector expands slightly in October

Non-manufacturing activity increases by 1 percentage point; new orders down; employment up.

Economic activity in the non-manufacturing sector grew in October for the 46th consecutive month, according to the nation's purchasing and supply executives in the latest Institute for Supply Management survey released today.

"Signs of improvement and stability are encouraging; however, the political environment and the cost of ObamaCare are causing a retrenching as costs escalate and margins shrink."

The overall non-manufacturing index registered 55.4% in October, 1 percentage point higher than September's reading of 54.4%. This indicates continued growth at a faster rate in the non-manufacturing sector. The new orders Index decreased by 2.8 percentager points to 56.8%, while the employment index increased 3.5 percentage points to 56.2%, indicating growth in employment for the 15th consecutive month. The prices index decreased 1.1 percentage points to 56.1%.

According to the survey, 10 non-manufacturing industries reported growth in October.

Anthony Nieves, chair of the ISM’s Non-Manufacturing Business Survey Committee, commented:

“Respondent comments are mixed, with the majority reflecting an uptick in business. A number of respondents indicate that they are negatively impacted by the government shutdown."

Comments also included a broader concern about government policies in general.

  • "Signs of improvement and stability are encouraging; however, the political environment and the cost of ObamaCare are causing a retrenching as costs escalate and margins shrink." (Retail Trade)
  • "Economy continues to be a challenge with consumer fear as a result of the government partial shutdown." (Accommodation & Food Services)
  • "Economic conditions continue to improve slowly in spite of government policy. Housing continues to lead." (Management of companies & Support Services)

The full report can be found here.

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