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US services index increases for fourth month in a row

October 05, 2020

The Institute for Supply Management’s Services PMI composite index rose to a reading of 57.8% in September from August’s reading of 56.9%. In total, September marked the fourth month in a row of growth in the index, which covers the US services industry.

The report is based on a survey of purchasing and supply executives across the US.

Readings above 50% indicate the services-sector economy is generally expanding; readings below 50% indicate it is shrinking. However, the ISM noted that readings above 48.5% over time generally indicate expansion of the overall economy.

The Services PMI is a composite index based on diffusion indexes of four indicators: business activity, new orders, employment and supplier deliveries. All are seasonally adjusted except for supplier deliveries.

The employment index rose to a level of 51.8% from 47.9% in August, indicating that it has moved on to growth after contracting for six months.