U.S. IHS Markit Services Jobs Gauge Falls to Lowest Since 2010

(Bloomberg) --

A gauge of employment in U.S. service industries swung into contraction in September for the first time since 2010, adding to unease heading into Friday’s jobs report.

IHS Markit’s non-manufacturing employment measure fell 1.8 points to 48.6, dropping below the 50 level that divides expansion and contraction and posting the steepest two-month drop in data since 2009. The main services index edged up 0.2 point to 50.9, according to the survey released Thursday.

Further cooling in employment may temper optimism on the labor market before the Labor Department’s monthly jobs report Friday, which is forecast to show private hiring has remained subdued.

Four of the gauge’s seven sub-indexes contracted for a second month: prices firms, input costs outstanding business and new export business. The measure of new business remained in expansion but fell the lowest since the survey began in 2009. Outstanding business fell to more than a five year low.

The gauge of input prices posted the sharpest contraction in the survey’s history.

“Price pressures have also abated in line with the weak demand picture, suggesting official inflation gauges could likewise moderate in coming months,” Chris Williamson, an economist at IHS Markit, wrote in a report.

--With assistance from Vince Golle.

To contact the reporter on this story: Alexandre Tanzi in Washington at atanzi@bloomberg.net

To contact the editors responsible for this story: Alexandre Tanzi at atanzi@bloomberg.net, Jeff Kearns

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