The key US services sector expanded for the ninth consecutive month in October, although at a slower pace than in September, according to the latest report from the Institute of Supply Management (ISM) In another sign that the economic recovery has lost momentum, the ISM said its monthly index of non-manufacturing activity fell in October to 53.1 from 53.9 in September, above forecasts for a decline to 51.7. A number above 50 indicates growth in the sector, which makes up roughly 80pc of the US economy.
Coming on top of a flood of weak economic news in recent weeks, the evidence that services growth slowed in October supports expectations that the Federal Reserve will make a modest cut in short-term interest rates at its regular policy meeting on Wednesday to shore up the wobbly recovery. The new orders index, a barometer of future growth, fell to 50.9 in October from 52.3, while the employment index fell further to 46.2 from 46.6. //www.fxcentre.com