US ISM non-manufacturing index hits three-month high in October

Activity in the US services sector rose to its highest level in three months in October, figures released on Wednesday showed.

The Institute for Supply Management's (ISM) non-manufacturing index, which surveys the sector's purchasing and supply executives, climbed to 59.1 last month from 56.9 and compared with analysts’ expectations for a 56.5 reading.

The sub-index monitoring new orders stood at 62, while the employment gauge came in at 59.2.

The gap between the ISM services and manufacturing indexes is the largest in over 14 years.

"As with the ADP and our own econometric model, however, the ISM non-manufacturing employment index has vastly over-stated the actual gains in NFP services employment in recent months," said Paul Ashworth, chief US economist at Capital Economics.

"Accordingly, while this is yet another data point implying that October’s payrolls were very strong, there is still scope for a downside disappointment."