Markit's flash US services PMI ticks higher in October

Markit’s flash US services purchasing managers’ index printed at 54.8 in October, up from 52.3 the month before.

This marks the highest reading since November 2015 and contrasts with the subdued growth patterns seen through the third quarter of 2016.

Adjusted for seasonal influences, the flash US Composite PMI Output Index rose to 54.9 in October from 52.3 in September and was above the 50 mark that separates contraction from expansion for the eighth month in a row.

Tim Moore, senior economist at IHS Markit, said: “The latest survey data reveal a decisive shift in growth momentum across the US service sector, which mirrors the more robust manufacturing performance seen during October. Taken together, the ‘flash’ PMIs suggest that the economy is growing at an annualised rate of around 2% at the start of the fourth quarter.

“Service providers experienced the fastest upturn in new business volumes since late-2015, which survey respondents linked to improving domestic economic conditions and signs of greater business investment in particular. That said, job creation remained relatively subdued in October, with firms reporting cautious hiring plans and efforts to alleviate pressures on margins.”