US services sector slows to nine-month low in October

Service sector output growth in the US declined to a nine-month low in October, data released on Tuesday showed.

The Markit 'flash' US services purchasing managers index fell to 54.4 in October from 55.1 in September, although it remained comfortably above the 50 threshold indicating growth.

The report attributed the slowdown to slowing new business growth and more cautious spending patterns, adding business confidence remained only marginally higher than the three-year low recorded in July, while the sector reported the weakest rise in payroll numbers since February.

"Combined with the manufacturing results released last week, the services PMI survey indicates that the pace of
economic growth slowed in October to the weakest since January, when business was hit by extreme
weather," said Markit's chief economist Chris Williamson.

“With the survey also finding price pressures to have remained subdued, especially in terms of wages, the sharper than expected slowdown in October will add to calls for policymakers to delay hiking interest rates until the economy finds a firmer footing.”