US Markit PMI shows slowdown in services sector in September

Momentum in the US services sector petered out in September, to reach its lowest level since June, data released on Monday showed.

The seasonally adjusted Markit US services purchasing managers’ index declined from 56.1 to 55.1 compared with the 55.6 flash estimate published last week.

The index pointed to sustained growth across the US service sector, although both output and new business grew at slightly slower rates than in the previous month.

Job creation remained steady, while the third decline over the last four months in backlogs of work pointed to lower pressure on operating capacity.

Meanwhile, the seasonally adjusted Markit US composite PMI output index declined from 55.7 to 55.0 in September, the 23rd consecutive month the index has remained above the 50 threshold that indicates expansion.

However, the latest reading was the lowest for the last three months as slower US private sector output growth mainly reflected a weaker contribution from services.

Markit added that the survey found the latest increase in new work received by service providers was the slowest since January, while business confidence across the service sector moderated since August and reached its second lowest level for just over three years.

“At the moment it remains unclear as to whether growth will weaken further as we move into the fourth quarter,” said Markit’s chief executive Chris Williamson.

“However, with inflationary pressures waning, policymakers may have some breathing space to gauge the extent of any slowdown.

“Lower fuel costs helped push average prices charged for goods and services dropping at steepest rate for nearly five years.”