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Activity in the U.S. service sector unexpectedly grew at a slightly faster pace in the month of September, according to a report released by the Institute for Supply Management on Tuesday.

The ISM said its services PMI inched up to 61.9 in September from 61.7 in August, with a reading above 50 indicating growth in the service sector. Economists had expected the index to edge down to 60.0.

“The slight uptick in the rate of expansion in the month of September continued the current period of strong growth for the services sector,” said Anthony Nieves, Chair of the ISM Services Business Survey Committee.

He added, “However, ongoing challenges with labor resources, logistics, and materials are affecting the continuity of supply.”

The uptick by the services PMI came as the business activity index climbed to 62.3 in September from 60.1 in August.

The new orders index also inched up to 63.5 in September from 63.2 in August, while the employment index edged down to 53.0 from 53.7.

On the inflation front, the prices index advanced to 77.5 in September from 75.4 in August, indicating an acceleration in the pace of growth.

The ISM released a separate report last Friday showing an unexpected acceleration in the pace of growth in U.S. manufacturing activity in the month of September.

The manufacturing PMI crept up to 61.1 in September from 59.9 in August. The uptick surprised economists, who had expected the index to edge down to 59.6.


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