ISM nonmanufacturing PMI rose to 54.9 in September from 51.5 in August
New orders index surged to 59.4, highest since February 2023
Services employment index dropped to 48.1

WASHINGTON, Oct 3 Reuters U.S. services sector activity jumped to a 112year high in September amid strong growth in new orders, more evidence that the economy remained on a solid footing in the third quarter.

The Institute for Supply Management ISM said on Thursday that its nonmanufacturing purchasing managers PMI index accelerated to 54.9 last month, the highest level since February 2023, from 51.5 in August.

A PMI reading above 50 indicates growth in the services sector, which accounts for more than twothirds of the economy. The ISM views PMI readings above 49 over time as generally indicating an expansion of the overall economy. Economists polled by Reuters had forecast the services PMI rising to 51.7.

The survey joined fairly upbeat August data on consumer spending and a smaller goods trade deficit in suggesting that the economy retained much of its momentum from the second quarter.

The Atlanta Federal Reserve is estimating that gross domestic product increased at a 2.5 annualized rate in the JulySeptember quarter. The economy grew at a 3.0 pace in the second quarter. The government39;s annual benchmark revisions published last week showed a stronger economic performance in the past three years than previously reported.

The ISM survey39;s new orders measure surged to 59.4, also the…