Services index drops to 16-month low

Tuesday, Oct. 5, 2004 | 9:23 a.m.

An index of the U.S. services economy dropped to a 16-month low in September, suggesting the rise in energy prices this year may limit the economic expansion.

The Institute for Supply Management's measure of services, including banking and retail trade, fell to 56.7 for the month, the lowest reading since May 2003, from August's 58.2. The gauge has still shown expansion, marked by readings higher than 50, since April 2003.

The report, issued four weeks from the election, covers about 85 percent of the U.S. economy.

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