The
latest report by IHS Markit revealed on Wednesday the seasonally adjusted final
IHS Markit U.S. Services Business Activity Index (PMI) came in at 58.7 in October,
up from 54.9 in September and slightly above the earlier released “flash”
estimate of 58.2. The latest reading
pointed to the quickest growth in business activity across the U.S. service
sector since July.
Economists
had forecast the index to stay unrevised at 58.2.
According
to the report, the October rise in output was supported by stronger growth in
new business. In line with greater new order inflows, firms signaled the
fastest increase in backlogs of work since data collection began in October
2009, despite a quicker pace of job creation. Nonetheless, concerns regarding
labor shortages and unstable supply chains led business confidence to decline
to an eight-month low. On the price front, the rate of cost inflation cooled to
an eight-month low. In response to a further rise in costs, firms raised their
selling prices at the fastest rate on record.