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US service sector growth quickens in September

The U.S. non-manufacturing sector grew at a faster rate in September, with the Institute for Supply Management, or ISM, non-manufacturing index registering at 59.8%, up from 55.3% in August.

The sector's business activity index rose to 61.3% from 57.5% in the previous month, while the new orders index stood at 63%, up from 57.1%. The employment index edged higher at 56.8% from 56.2%.

"The non-manufacturing sector has reflected strong growth in the month of September despite the impact on the supply chain from the recent hurricanes," said Anthony Nieves, chair of the ISM non-manufacturing business survey committee. He also said that 15 non-manufacturing industries reported growth in September.

Meanwhile, the seasonally adjusted IHS Markit U.S. services business activity index registered at 55.3 in September, down slightly from 56.0 in the previous month, with new business received by firms easing from a 25-month high in August. Optimism among firms in the service sector fell to its lowest level in seven months.

Input cost and output charge inflation accelerated in September, with some companies attributing the higher cost burden to the recent hurricanes that affected energy, fuel and raw materials prices.

With the latest data on the service sector, the final seasonally adjusted IHS Markit U.S. composite PMI output index stood at 54.8 in September, down from 55.3 in August but slightly higher than the flash estimate of 54.6.