Activity in the US services sector is inching toward contraction.according to new data release Friday.
That's an 8-month low and down from 50.5 in August. Economists surveyed by Bloomberg had expected the services sector to rebound to a reading of 50.7 in September. The composite PMI came in at 50.1, a 7-month low and down from 50.2 in August, driven by declines in the services sector. Any reading above 50 for these indexes represents expansion in the sector; readings below 50 indicate contraction.
“PMI data for September added to concerns regarding the trajectory of demand conditions in the US economy following interest rate hikes and elevated inflation," S&P Global Market Intelligence principal economist Siân Jones said. "Although the overall Output Index remained above the 50.0 mark, it was only fractionally so, with a broad stagnation in total activity signaled for the second month running.
While manufacturing has continued to recover, the services sector has dragged on overall output since
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