Investing.com -- The U.S. services sector unexpectedly accelerated in August, while prices for inputs jumped, in a sign of resilient demand that may contribute to stickier inflation in the world's largest economy.
The Institute for Supply Management said on Wednesday that its non-manufacturing purchasing managers' index increased to 54.5 during the month, up from 52.7 in July. Economists had expected the figure, which was above the 50-point threshold denoting expansion, to come in at 52.5.
The figure serves as an indicator of activity in the services industry, a crucial sector that accounts for over two-thirds of the U.S. economy. At current levels, it hints at U.S. economic strength in the face of an unprecedented spike in interest rates since March 2022.
A gauge of new orders received by services business edged up to 57.5 last month from 55.0 in July, while a measure of prices paid by these companies for inputs also rose to 58.9 from 56.8.
Fed officials will likely be keeping an eye on the movement in service sector prices. These are typically less responsive to rate hikes, but still play a crucial role in the central bank's fight to cool inflation down to its 2% target.