The U.S. private sector continued to grow in September, driven by an upturn in services activity in contrast with relatively subdued improvement in manufacturing, according to a report released Friday.
The purchasing managers' flash U.S. composite output index compiled by data provider IHS Markit fell to 54.6 from 55.3 in August. Readings above the 50 mark separate expansion from contraction.
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The Flash U.S. Services Business Activity Index fell to 55.1 from 56 a month earlier. Economists polled by the Wall Street Journal had forecast a services flash reading of 55.8.
The Flash U.S. Manufacturing PMI grew to 53 in September, up from 52.8 a month earlier. Economists polled by the Wall Street Journal had forecast a manufacturing flash reading of 52.6.
Rising consumer and business spending helped increase backlogs of work and employment gains in September throughout the service sector, the report said.
Separately, manufacturers reported the steepest input-price inflation in 27 months as Hurricane Harvey led to higher transportation costs and supply disruptions. Supply delays were the most widespread in 2 1/2 years, IHS Markit said.
Chris Williamson, chief business economist at IHS Markit, said "the manufacturing sector, which was already struggling in August, consequently acted as an increasing drag on the economy, leaving services as the main growth driver."
Markit's flash reading is based on about 85% to 90% of total PMI survey responses that go into the final report each month.
Write to Austen Hufford at Austen.Hufford@wsj.com
(END) Dow Jones Newswires
September 22, 2017 11:10 ET (15:10 GMT)