The September ISM Services Index came in at 54.9, down from August’s 55.4, according to the Institute for Supply Management. A value above 50 reflects expansion in the services sector, while a value below 50 indicates contraction. The New Orders Index registered 59.8, down from August’s 60.9. The Employment Index edged up to 50.1, an increase from 47.8 in August and moved above the 50 threshold. Prices Paid increased to 74, from 72.6 in August, suggesting cost pressures remained elevated.
The ABA Office of the Chief Economist believes despite the lower September topline reading, the index remained above 50, reflecting continued expansion in the services sector. Higher employment activity and expansionary new orders levels came amidst persistent cost pressures. For banks, although price pressures remain, a strong services sector and a stable labor market should continue to support credit performance and consumer spending.
