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The US ISM non-manufacturing index dropped modestly to 60.3 in October. According to analysts from Wells Fargo, despite the slide, the index continues to signal a robust pace of activity.

Key Quotes:  

“ISM non-manufacturing came off a 21-year high in October, but at 60.3 the index points to the economy continuing to expand at a solid rate. Although most major indices edged back last month, index levels remain near the highs of the current expansion.”

“Among the headline’s sub-components, current business activity eased 2.7 points to a still-lofty reading of 62.5. New orders were virtually unchanged at 61.5.  

“Elevated readings on backlogs of orders and supplier delivery times continue to point to a tight supply chain. Input costs continue to rise, with the prices paid component coming in above 60 for a 10th consecutive month. We expect inflation to continue to trend higher in this environment.”