Investing.com - The U.S. services sector accelerated in September, but employment slowed significantly, consistent with an easing labor market.
The Institute for Supply Management said on Thursday that its non-manufacturing purchasing managers' index increased to 54.9 during the month, up from 51.5 in August.
Economists had expected the figure, which was above the 50-point threshold denoting expansion, to come in at 51.7.
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.
A measure of employment in the sector fell to 48.1, from 50.2, below the 50-point level that indicates contraction.
This will be a potential worry for the Federal Reserve which appears laser-focused on the labor market having started a rate-easing cycle last month.
A gauge of new orders received by services businesses climbed to 59.4 last month from 53.0 in August, while a measure of prices paid by these companies for inputs also rose to 59.4 from 57.3. a surprise given it had been expected to dip slightly.