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The broad US services sector cooled slightly in October after a record high in the previous month, but continued very strong growth, according to an industry survey released Monday.
Some industries expressed concern about the US-China trade war but they have felt the pinch much less than commodities-driven manufacturing industries, according to the Institute for Supply Management.
ISM said its monthly non-manufacturing index fell 1.3 points to 60.3 percent, surprising economists who had expected a bigger dip from the record pace in September.
Any reading above 50 percent indicates growth the services industry has recorded uninterrupted expansion for nearly nine years.
‘We had a slight cooling off but still a very strong reading,’ said Anthony Nieves, chair of ISM’s survey committee for the non-manufacturing sector.
‘Over the course of reading through our respondents’ comments, they have indicated still concern about tariffs and how the potential impact would be for this sector,’ he told reporters.
Across the board, the survey reflected strong  growth, and only one of the 18 industries surveyed reported a slowdown in the month: education services. 
The indices for business activity and employment both fell 2.7 points, imports dropped four and prices fell 2.5 while inventories grew 1.5 points.
Nieves said the faster inventory growth for the month partly reflected efforts to build up supplies ahead of tariff-driven price increases.
US President Donald Trump plans to meet later this month in Argentina with Chinese President Xi Jinping, but the White House has sent conflicting signals about the status of a resolution of the US-China trade war.
Tariff rates on about $200 billion in US imports from China are due to rise to 25 percent from 10 percent on January 1 if the two sides fail to reach a resolution.
‘Tariffs are beginning to impact business,’ a respondent in the construction sector was quoted as saying.
‘We ask our suppliers to hold pricing for six months, but we are experiencing difficulties.’
RDQ Economics said the report, along with recent job creation numbers, suggested robust GDP growth should continue in the final quarter of 2018.
‘Between the payroll data and the ISM, it appears that the fourth quarter is off to a fairly strong start,’ the firm said in a client note.