U.S. services activity picked up in October, with solid growth in new orders, but employment remains weak

US services activity picked up in October, mainly driven by solid growth in new orders, but employment remained weak, indicating that the labour market remains sluggish amid economic uncertainty caused by import tariffs. The Institute for Supply Management (ISM) said the US non-manufacturing PMI rose to 52.4 in October from 50.0 in September. On the face of it, the PMI data points to a solid start to the fourth quarter for the US economy. But official economic data fell into a "black screen" due to the longest government shutdown in US history, further clouding the economic outlook. The weak export order data is in line with the results of a manufacturing survey released by ISM on Monday, which pointed to "ongoing trade frictions". As orders picked up, input costs paid by service companies also rose, but at a moderate pace, consistent with recent data showing cooling inflation in the services sector. However, the increase in orders did not significantly boost employment. The service sector employment index rose from 47.2 in September to 48.2, which has been below the line of prosperity and decline for five consecutive months.