LSE: US ISM services index drops more than expected in August
(ShareCast News) - Growth in the US economy's services sector eased more than expected in August, according to figures from the Institute for Supply Management (ISM).
The ISM services index fell to 51.4 in August from 55.5 the month before, missing expectations for a reading of 55.0 and hitting its lowest level since February 2010. A reading above 50 indicates expansion.
The non-manufacturing business activity index dropped to 51.8 from July's 59.3, with the new orders index down to 51.4 from 60.3.
Meanwhile, the employment index fell to 50.7 in August from July's 51.4.
Naeem Aslam, chief market analyst at Think Markets, said: "When you see the ISM non-manufacturing number dropping like this, it shakes the floor on which traders are building the hopes that the Fed could increase the interest rate. A few more readings like this and you can say goodbye to interest rate hikes.
"The US dollar dropped on the back of this and traders are taking profits off the table. This is good news if you have a position in gold, as the drop in the US rate hike expectations will continue to push the gold price higher."
