Investing.com - Service sector activity in the U.S. grew at its fastest pace in 11 months in September, bouncing back from a six and a half-year low, industry data showed on Wednesday.
In a report, the Institute of Supply Management (ISM) said its non-manufacturing purchasing manager's index (PMI) rose to 57.1 last month from 51.4 in August. That was its highest level since October 2015 and its 80th consecutive month of growth.
Analysts had expected the index to increase to 53.0.
On the index, a reading above 50.0 indicates the non-manufacturing sector economy is generally expanding, below 50.0 indicates the sector is contracting
The Non-Manufacturing Business Activity Index increased to 60.3, 8.5 points higher than August’s reading of 51.8. Analysts had forecast it to rise to 52.2.
The New Orders Index registered 60.0 in September, 8.6 points higher than the reading of 51.4 in August.
The Employment Index increased 6.5 points to 57.2 from August’s reading of 50.7.
The Prices Index increased 2.2 points to 54.0 from August’s 51.8. That was the sixth consecutive increase
The ISM indicated that the comments from the respondents were mostly positive about business conditions and the overall economy, but that a degree of uncertainty did exist due to geopolitical conditions coupled with the upcoming U.S. presidential election.
With 14 industries reporting growth in September, only four reported contraction. They were: four industries reporting contraction in September are: Mining; Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; and Educational Services.
Immediately following the report, which was released simultaneously with factory orders, the dollar moved higher. EUR/USD was trading at 1.1194 from around 1.1208 ahead of the release of the data, GBP/USD was at 1.2734 from 1.2749 earlier, while USD/JPY was at 103.47 from 103.19 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, traded at 96.27 compared to 96.08 prior to the release.
Meanwhile, U.S. stock markets were trading higher after the open. The Dow 30 gained 0.56%, the S&P 500 rose 0.45%, while the Nasdaq Composite traded up 0.43%.
Elsewhere, in the commodities market, gold futures traded at $1,270.25 a troy ounce, compared to $1,274.05 ahead of the data, while crude oil traded at $49.59 a barrel from $49.56 earlier.