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Service sector index registers highest reading since August 2005

  • The Institute for Supply Management's index registered 59.8 in September, beating estimates of 55.5 from economists polled by Reuters.
  • This represents the highest reading for the service sector index since August 2005.
  • A reading above 50 for the index indicates expansion in the service sector, and a reading below 50 signals contraction.
An employee carries an order for a customer at a Domino's Pizza restaurant in Detroit.
Sean Proctor | Bloomberg | Getty Images
An employee carries an order for a customer at a Domino's Pizza restaurant in Detroit.

Non-manufacturing economic activity rose in September, beating expectations and building on momentum begun in August.

The Institute for Supply Management's index registered 59.8 in September, beating estimates of 55.5 from economists polled by Reuters. This represents the highest reading for the service sector index since August 2005 when the index hit 61.3, according to ISM.

"The non-manufacturing sector has reflected strong growth in the month of September despite the impact on the supply chain from the recent hurricanes," Anthony Nieves, chair of the ISM survey committee, said in a statement.

In August the index registered 55.3, a reversal from a decline in July.

A reading above 50 for the index indicates expansion in the service sector, and a reading below 50 signals contraction.

Fourteen of the 17 nonmanufacturing industries surveyed reported growth in September. Three industries — educational services, mining and agriculture, forestry, fishing and hunting — reported contractions.

The business activity index increased 3.8 percentage points in September from August, reflecting growth for a 98th consecutive month.

The new orders index also registered higher at 63 in September, 5.9 percentage points higher than the reading of 57.1 in August.

The employment index increased for the 43rd consecutive month by 0.6 percentage points in September to 56.8 percent. U.S. companies scaled back hiring to an 11-month low in September after two powerful hurricanes disrupted some business activities. U.S. companies added 135,000 jobs in September, the smallest monthly increase since October 2016.

Reuters contributed to this report.