US services PMI SP Global
  • Prior was 50.5
  • Composite index 50.2 vs 50.1 prelim
  • Companies depleted their backlogs of work at the fastest pace since November 2022 in order to sustain current business activity levels
  • New orders rate of contraction quickened to the sharpest since December 2022
  • Three month high in employment
  • The pace of charge inflation accelerated to the fastest since July as firms sought to pass through greater costs to customers.

The ISM services reading is due at the top of the hour. Notably, this indicator is near seven-month lows while the ISM metric has been accelerating. That kind of divergence doesn't help to build conviction on the direction of the US economy.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:

"The final PMI data for September add to indications that the US economy has started to cool again after a resurgence of growth earlier in the summer. Inflationary pressures in the service sector meanwhile remain uncomfortably sticky.
"The biggest change in recent months has been the waning in demand for consumer services, such as travel, tourism and recreation, along with a slump in financial services activity.
"Providers of consumer-oriented services report that a revival of demand in the spring has gradually lost momentum amid the ratcheting up of interest rates and increased cost of living at a time of diminishing savings. In the financial services sector, financial conditions are tightening and uncertainty about the outlook is subduing confidence. Both sectors are now reporting falling activity levels, taking away a major source of support to the wider economy's expansion. "
The economy therefore looks to be moving into the fourth quarter on a weak footing, hinting at slower GDP growth as we head toward the end of the year.
"Average prices charged for goods and services meanwhile continue to rise at a rate well above the pre-pandemic average, with service sector charge inflation remaining especially stubborn, in part due to recent oil price hikes."