Growth in the key US service sector slowed in September according to an economic report released today.
The Institute for Supply Management said its index on service activities slowed roughly in line with expectations, which led traders to curb their expectations of an aggressive rate-cutting campaign by the Federal Reserve.
However, they remained confident of lower rates by year-end.
ISM said its index on service activities slipped to 54.8 in September, its lowest since March, from August's 55.8. Analysts had expected the index likely fell to 55.0.
An ISM reading above 50 suggests an expanding service sector, which accounts for roughly 80 percent of the economy.
Despite showing signs of fatigue, the service sector picked up its hirings last month after shedding jobs in August, according to the latest ISM data.
The employment component in the ISM non-manufacturing report rose to 52.7 in September from 47.9 in August.
This followed an ISM report earlier this week showing a slight job improvement in the manufacturing sector in September.
