The French service sector experienced a marginal contraction in September, as evidenced by the French services PMI report, which follows the Olympic Games' positive impact in August. New orders and output fell due to a decrease in demand from domestic and international consumers. Backlogs were down by the most in nine months. Nevertheless, employment increased marginally, which is indicative of the optimism of firms regarding future development, leading to business confidence spiking to a 26-month high.

Furthermore, input cost inflation decreased to its lowest level in more than three years while output prices remained constant, thereby concluding a protracted period of price increases. Nevertheless, the sector's performance was impacted by reduced visitor numbers and uncertainty among clients. In general, the report suggests that the service sector's long-term prospects are optimistic, despite the short-term challenges resulting from the post-Olympic decline. This update improves the French RPI to minus 18 and the RPI-P to 5.

No revisions are expected to the flash data.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of around 750 manufacturing and service sector companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.