The S&P Global US Composite Purchasing Managers' Index final reading came in at 53.9 in September compared to 54.6 in August, and 55.1 in July, signaling a softening of demand growth with employment barely rising.

The US Services PMI Business Activity Index recorded 54.2 in September, down from 54.5 in August, and below expectations of 53.9 in the Econoday survey of forecasters.

US private service sector companies signaled a further, but nonetheless weaker, expansion of business activity. Slower growth was linked to a softer expansion of new work, despite an improvement in foreign demand for the first time in six months, it said. Meanwhile, sentiment regarding the outlook strengthened, linked in some instances by firms to lower interest rates.

The report noted lower job gains with some reluctance to replace departed workers due to slightly softer rates of demand and activity growth.

As for price inflation, the report said cost pressures remained elevated, fueled mainly by tariffs and higher salary payments. In response, service providers raised their own selling prices but at the slowest rate for five months, it said.

The consensus sees no revision from the flash at 53.9 for services

US Services Purchasing Managers' Index (PMI) is based on monthly questionnaire surveys collected from over 400 U.S. companies which provide a leading indication of what is happening in the private sector services economy. It is seasonally adjusted and is calculated from seven components, including New Business, Employment and Business Expectations.

Investors need to keep their fingers on the pulse of the economy because it indicates how various types of investments will perform. The Markit Services PMI provides advance insight into the services sector, which gives investors a better understanding of business conditions and valuable information about the economic backdrop of various markets. The stock market likes to see healthy economic growth which generally 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. The PMI data are also used by many Central Banks to help make interest rate decisions.

The IHS Markit Services Flash data give a detailed look at the services sector, the pace of growth and the direction of this sector. Since the service sector accounts for more than three-quarters of U.S. GDP, this report has a significant influence on the markets. In addition, its sub-indexes provide a picture of new business, employment, business expectations and prices.