The U.S. services sector returned to growth in October, according to the latest Services ISM Report on Business. The index rose to 52.4, up from September’s 50.0 reading, signaling expansion after a brief pause.
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ISM Chair Steve Miller said the uptick reflects “positive signs” in activity and new orders, even as employment remains soft. “The continued contraction in the Employment Index shows a lack of confidence in the continued strength of the economy,” he noted.
Business activity climbed to 54.3, while new orders improved to 56.2. The employment index, at 48.2, showed a slower pace of contraction, and supplier deliveries came in at 50.8. Eleven sectors reported growth in October, including retail, healthcare, transportation, and real estate.
Some respondents said tariffs and the ongoing federal government shutdown were affecting operations. “Uncertainty due to the federal government shutdown has shuttered many non-essential functions,” one panelist said. Another noted that “tariffs continue to cause disruption in contracts and contracting, driving up prices on goods.”
Miller added that while order backlogs are shrinking, demand remains steady in health care and retail. “Comments from many industries mentioned continuing demand stability,” he said.
For the full version of the report, visit Logistics Management.
