Service sector grows at the slowest pace in 3 months

The U.S. service sector expanded in October at the slowest pace in three months amid continuing cost pressures. The Institute for Supply Management’s services index fell 0.4 point to 54.5 last month, according to data released Nov. 4. Readings above 50 indicate expansion. Resilient consumer spending, a stable job market and strong business investment have supported demand for services throughout the year. But firms are also coping with mounting costs and delivery delays. ISM’s measure of prices paid for materials and services fell, though at 73 the reading was the second-highest since mid-2022. The measure had hit a nearly one-year low in February, just before the Iran war sent fuel costs sharply higher. Supply chains have also been affected by tariffs and the Middle East conflict. A gauge of supplier delivery times jumped last month to the highest since April. “Tariffs and fuel cost impacts continued to be the most-cited issues impacting respondents’ supply chains, while many respondents indicated they are not yet seeing the full impact of these cost escalations or have not passed them through to customers,” Steve Miller, chair of ISM’s Services Business Survey Committee, said in a statement. “This indicates that more pricing pressure is on the way if oil and tariff cost impacts are not mitigated.” .@ISM Services PMI® Report: Demand growth cooled in October but was still solid for the sector making up most of the #economy, while #employment ticked up, lead times got longer and prices remained a pain point. The #ISMPMI was down 0.4 point, to 54.5%. https://t.co/3Mvrzgk0WD — Institute for Supply…

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