The Institute for Supply Management (ISM) reported on Monday that its non-manufacturing index (NMI) came in at 57.8 in September, which was 0.9 percentage point higher than the August reading of 56.9 percent. The reading represented growth in the services sector for the fourth straight month after the contraction in April and May.

Economists forecast the index to decrease to 56.3 last month. A reading above 50 signals expansion, while a reading below 50 indicates contraction.

Of the 18 manufacturing industries, 16 reported increases last month, the ISM said, adding that respondents' comments remained mostly optimistic about business conditions and the economy, which correlated directly to those businesses that were operating.

According to the report, the ISM’s non-manufacturing Business Activity measure rose 0.6 percentage point to 63.0 percent from August’s figure, the New Orders gauge jumped 4.7 percentage points to 61.5 percent from August’s reading and the Employment Index increased 3.9 percentage points to 51.8 percent from the August reading. Meanwhile, the Prices Index fell 5.2 percentage points to 59.0 percent from August’s reading, the Supplier Deliveries Index dropped 5.6 percentage points to 54.9 percent from August’s figure and the Backlog of Orders Index declined 6.5 percentage point to 50.1 percent from the August reading.

Commenting on the data, the Chair of the ISM Non-Manufacturing Business Survey Committee, Anthony Nieves, noted, “The past relationship between the Services PMI and the overall economy indicates that the Services PM for September (57.8 percent) corresponds to a 3.2-percent increase in real gross domestic product (GDP) on an annualized basis.”