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Service Industries in U.S. Grow at Slower Pace Than Forecast

Bloomberg Businessweek (10/03/13) Jeanna Smialek

The Institute for Supply Management’s nonmanufacturing index dropped to 54.4 in September from 58.6 in August, the biggest decline since November 2008. Economists surveyed by Bloomberg had estimated a rate of 57. A reading above 50 indicates expansion. Rising mortgage rates may be slowing housing progress, but movement in the manufacturing industry may be creating service demand.

The ISM’s index of new orders in the service industry fell to 59.6 in September from 60.5 in August. The employment index at nonmanufacturing companies dropped to 52.7 from 57. Nine industries reported rising employment; seven industries reported falling employment.