The Institute for Supply Management said Tuesday that its nonmanufacturing index fell in October, adding to signs that an economic recovery may be losing steam.
The index fell to 53.1 in October from 53.9 in September. On average, economists were expecting the number to come in at 51.7, according to
. Still, any reading above 50 signals expansion.
The ISM report, which is based on a survey of more than 370 purchasing managers across 60 different industries, seems to support the notion that the
will make a more modest cut in short-term interest rates Wednesday. It also reinforces the dreary picture painted by Friday's jobs report, which showed a small decline in nonfarm payrolls and a spike in unemployment.
"New orders grew at a slower rate than in September, and the Backlog of Orders Index indicated the second consecutive month of increase in order backlogs," said ISM survey director Ralph G. Kauffman.
The service sector makes up about 80% of the U.S. economy, including financial services, transportation, utilities and entertainment.
Treasury issues were under pressure following the report's release, with the 10-year note slipping 13/32, pushing its yield to 4.09%.