Manufacturing economic activity eased in October after two months of momentum.
ISM manufacturing index hits 58.7 in October; construction spending up 0.3 percent in September
The Institute for Supply Management's index registered 58.7 in October, slightly better than the 58.6 expected from economists polled by Reuters. That represents a decline from September's 59.8, which was the highest reading for the service sector index since August 2005, according to ISM.
A reading above 50 for the index indicates expansion in the service sector, and a reading below 50 signals contraction.
Manufacturing and labor strength likely keep the Federal Reserve on track to increase interest rates in December. The U.S. central bank is not expected to raise rates when policymakers conclude a two-day meeting later on Wednesday.
September's jump in the index was driven by supply chain disruptions, especially in the chemical products sector. The supply bottlenecks, which also pushed up prices of raw materials, resulted in a longer delivery times.