Gold slips as US service sector growth misses expectations

While the index remains above the 50-point threshold that separates expansion from contraction, the drop from August’s 55.4 reading prompted a cautious market response. Steve Miller, chair of the ISM Services Business Survey Committee, highlighted that the Business Activity Index slowed significantly, falling 5.2 percentage points to 56.5 percent. Despite this deceleration, the sector’s employment landscape showed signs of life, with the Employment Index climbing to 50.1 percent, marking its first expansionary reading in three months.

Inflationary pressures remain a persistent theme for industry respondents. The Prices Index hit 74 percent, its highest level since July 2022, marking the sixth time in seven months that the metric has exceeded 70 percent. Miller noted that fuel costs and tariffs were the most frequently cited headwinds impacting supply chains, with fuel-related expenses mentioned twice as often as other operational hurdles. Meanwhile, the Backlog of Orders index reached 58.3 percent—the highest level since July 2022—suggesting that while new order growth has eased, companies are still struggling to clear existing demand.