The Institute for Supply Management has reported that non-manufacturing activity increased more slowly in October than in September. All told, the Tempe, Arizona-based trade group affirmed that its gauge of the health of the critical services sector came in at a reading of 54.2 last month. That was less than both the consensus of 54.7 and the September reading of 55.1.

It should be noted that a survey result in excess of 50.0 signals that the services sector, which accounts for some two-thirds of aggregate economic activity, is expanding. A result below 50.0 is consistent with a contracting non-manufacturing arena. All told, this was the 34th consecutive month in which non-manufacturing activity had increased.

Individually, the report showed that new orders increased last month. However, with a reading of 54.8, they eased off moderately from the September result, when the survey had registered a reading of 57.7. There was a different case in employment, which saw materially stronger growth of 54.9 versus 51.1 in the prior month. Supplier deliveries, meantime, held steady at 51.5; prices increased more slowly, but still strongly, at 65.6 versus 68.1. Backlogs, meanwhile, again declined, but at a lesser rate of 49.0 versus 48.0 in September.

The vast services sector again fared better than the manufacturing area, which had its gauge of industrial activity increase last month, but at a materially slower rate of 51.7 in October than in this companion survey. However, manufacturing did tick up from the September result, albeit very nominally. All told, this was the first time since June that non-manufacturing had cooled from the prior month.

Interestingly, for the past 12 months, the average monthly score on the non-manufacturing scale has been 54.2, which matched the latest result for October, with the overall range of activity for this stretch being between 52.1 and 57.3. Taken as a whole, the report was decent, but a little below what had been expected, underscoring the often uneven nature of the long climb back.           

At the time of this article's writing, the author did not have positions in any of the companies mentioned.