U.S. Services Index Unexpectedly Inches Higher In August

(RTTNews) - The Institute for Supply Management released a report on Thursday unexpectedly showing a slight uptick by its reading on U.S. service sector activity in the month of August.

The ISM said its services PMI inched up to 51.5 in August from 51.4 in July, with a reading above 50 indicating growth in the sector. Economists had expected the index to edge down to 51.1.

"For a second straight month, the slow growth indicated by the Services PMI reading was reinforced by panelists' comments," said Steve Miller, Chair of the ISM Services Business Survey Committee.

He added, "Slow-to-moderate growth was cited across many industries, while ongoing high costs and interest-rate pressures were often mentioned as negatively impacting business performance and driving softness in sales and traffic."

The uptick by the headline index came as the new orders index crept up to 53.0 in August from 52.4 in July, indicating modestly faster growth.

Meanwhile, the business activity index fell to 53.3 in August from 54.5 in July and the employment index dipped to 50.2 in August from 51.1 in July, but the readings above 50 still indicate growth.

The report also said the prices index inched up to 57.3 in August from 57.0 in July, suggesting prices increased at a slightly faster rate.

On Tuesday, the ISM released a separate report showing its reading on U.S. manufacturing activity saw a modest increase in the month of August but continued to indicate contraction.

The ISM said its manufacturing PMI inched up to 47.2 in August from 46.8 in July, with a reading below 50 indicating contraction. Economists had expected the index to rise to 47.5.