Service Sector Still Expanding, Job Component Rises

- ISM Non-Manufacturing for September fell to 54.8 versus estimates of 54.6 and 55.8 in August.

BOTTOM LINE: US service industries continued to grow in September, easing concerns that the housing slump will end the six-year expansion, Bloomberg reported. The New Orders component of the index fell to 53.4 from 57 the prior month. The Inventories component fell to 50 from 57. The Prices Paid component rose to 66.1 from 58.6 in August. The Employment component rose to 52.7 from 47.9 the prior month. As well, Challenger reported job cuts fell 28.5% during September and ADP reported 58,000 new jobs were created during the month. I expect the service sector to remain healthy over the intermediate-term as Americans’ net worth makes new record highs, interest rates remain low, inflation decelerates further, housing fears subside, stocks continue making record highs, wages continue to substantially outpace inflation and unemployment remains historically low.