US service sector grows at slowest pace in four months in October

The latest Markit services purchasing managers’ index declined from 55.1 in September to 54.8 last month, remaining comfortably above the 50 average that marks expansion but below the 55.8 long-term average.

Meanwhile, the seasonally adjusted final composite PMI was unchanged from September’s three-month low of 55, as new business volumes increased at a slower rate in October and the latest expansion of new order books was the slowest since January.

“The surveys nevertheless signal ongoing moderate growth of business activity and employment in the manufacturing and service sectors, which will keep alive the possibility that policymakers could be persuaded into raising interest rates before the year is over,” said Markit’s chief economist Chris Williamson.

“However, the survey data also reinforce strong arguments – notably a continued absence of inflationary pressures – that there is no rush to tighten policy.”