US ISM Services PMI dropped from 56.7 to 54.4 in October, below expectation of 55.2. That’s also the lowest reading since May 2020. Looking at some details, business activity/production dropped from 59.1 to 55.7. New orders dropped from 60.6 to 56.5. Employment dropped from -3.9 to 53.0. Prices rose from 68.7 to 70.7.
ISM said: “Growth continues at a slower rate for the services sector, which has expanded for all but two of the last 153 months. The sector had a pullback in growth for the second consecutive month in October due to decreases in business activity, new orders and employment.”
“The past relationship between the Services PMI and the overall economy indicates that the Services PMI for October (54.4 percent) corresponds to a 1.5-percent increase in real gross domestic product (GDP) on an annualized basis.”