Growth in the U.S. service sector eased in September from the prior month, though continued expansion in output and new orders bolstered staffing, according to a Wednesday report.
The IHS Markit U.S. services business activity index slipped to 55.3 from 56 in August. Readings above 50 indicate expansion while readings below 50 indicate contraction.
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Economists surveyed by The Wall Street Journal expected a September reading of 55.1.
The report said that a number of survey respondents linked the surging business activity to robust client demand in domestic markets.
Inflation pressures continued to intensify in September, the report noted, as input costs and output charges rose. Cost burdens faced by service providers increased at the fastest pace since June 2015, the report said.
Slower service-sector expansion also impacted the purchasing managers' composite index, known as the Composite PMI, which fell to 54.8 in September from 55.3 in August. That index uses surveys from both the services and manufacturing sector.
"Measured across both manufacturing and services, future optimism is at its lowest since February, suggesting companies have become increasingly cautious about the outlook," said Chris Williamson, chief business economist at IHS Markit. "However, while optimism has slipped, the 'hard' survey data on recent output, new orders and hiring trends remain solid."
Write to Ezequiel Minaya at Ezequiel.Minaya@wsj.com
(END) Dow Jones Newswires
October 04, 2017 10:58 ET (14:58 GMT)