The Institute for Supply Management, the Arizona-based trade group, which late last week reported a surprising further increase in manufacturing activity
, this morning posted data showing that the companion non-manufacturing sector had also firmed up last month, and to a greater degree than expected.
Specifically, that gauge of activity in the services sector showed a jump to a reading of 55.4 in October, besting both the September increase of 54.4 and the 54.0 expectation. It should be noted that a score above 50.0 denotes a non-manufacturing sector that is on the mend; a score below 50.0 suggests that a contraction in this category is under way.
Meanwhile, in addition to the aggregate score of 55.4, this sector saw increases in business activity, inventory sentiment, and employment, with the latter firming up from 52.7 in September to 56.2 last month. Only supplier deliveries, which eased back from a neutral 50.0 reading in September, to 49.0 in the latest month, showed a decline. Several categories, though, did show lesser increases in October than September.
As to the latest month, the 55.4 score was just a bit above the 12-month average of 55.0, while the range for the past year has been between 52.8 on the low end and 58.6 on the upper end. Taken in total, the performance was quite good, and provided further evidence that the recent government shutdown, albeit a depressant to a degree, was by no means a game changer for the U.S. economy in the current quarter.
All told, meantime, 10 non-manufacturing industries reported growth last month, led in order by management companies, retail trade, information, and educational services. Conversely, eight of the industries surveyed reported a contraction in October. Here, the list of declining sectors was led by the arts, entertainment and recreation, and agriculture.
Overall, the comments by responders were largely favorable, suggesting that sales were up from a year earlier, for example, while others suggested that they were experiencing an increase in the level of interest in their services. At the time of this article's writing, the author did not have positions in any of the companies mentioned.