Economic activity in the US services sector, the biggest part of the economy, stagnated in September while business activity and employment both contracted.
The services purchasing managers index (PMI) was at 50 in September, at the threshold between expansion and contraction, down from 52 in August, according to the Institute for Supply Management's (ISM) monthly survey.
The business activity/production index fell to 49.9 in September, in contraction for the first time since May 2020, from 55 in August.
The ISM survey was released as a partial federal government shutdown has paused the release of key economic data, including Friday's highly anticipated September employment report.
The dearth of data economists and companies use for employment and business decisions comes as the Federal Reserve last month began to cut borrowing costs after Labor Department data revealed four months of very weak hiring.
New orders remained in expansion, at 50.4, but down from 56 in August. The employment index rose to 47.2 in September from 46.5 in August, a fourth month of contraction.
"Employment continues to be in contraction territory, thanks to a combination of delayed hiring efforts and difficulty finding qualified staff," ISM said.
The supplier deliveries index rose by 2.3 points to 52.6, its highest since February, indicating slower supplier delivery performance, a sign of an improving economy. The inventories index dropped to 47.8, its first contraction after three months of expansion.
New export orders fell to 46.5 in September from 47.3, showing accelerating contraction, while imports fell to 49.2 from 54.6.
The prices index climbed to 69.4.
