The US service sector expanded in October at the slowest pace in three months, with the ISM services index falling to 54.5. Despite resilient consumer spending and a stable job market, businesses face mounting costs and delivery delays. The prices paid index remained elevated at 73, the second-highest since mid-2022, driven by tariffs and fuel costs linked to the Iran war.
Supplier delivery times jumped to the highest level since April, reflecting ongoing supply chain disruptions. New orders slipped to a four-month low but stayed in expansionary territory, while order backlogs reached their highest level since 2022. Fifteen service industries reported growth, including transportation and entertainment, though construction and healthcare contracted.
Employment in the sector rose to 51.4, the highest since February, as firms cautiously balance demand with rising costs.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing