(Bloomberg) — US business activity expanded at a slightly slower pace in early September, while expectations deteriorated and a gauge of prices received climbed to a six-month high.

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The S&P Global flash composite output index ticked down 0.2 point to 54.4 as manufacturing contracted for a third month and service providers expanded at a slightly slower rate. Figures higher than 50 indicate expansion.

The composite measure of orders growth slowed and employment shrank for a second month. The survey’s index of future output dropped to an almost two-year low on growing concerns about the demand outlook and uncertainty tied to the November presidential election.

The composite measure of prices received increased to 54.7, while the index of prices paid for inputs that include materials and wages climbed to a one-year high.

The figures, released Monday, follow the Federal Reserve’s decision last week to lower interest rates by a half percentage point. Officials expressed more confidence that inflationary pressures are ebbing.

“The early survey indicators for September point to an economy that continues to grow at a solid pace, albeit with a weakened manufacturing sector and intensifying political uncertainty acting as substantial headwinds,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement.

“A reacceleration of inflation is meanwhile also signalled, suggesting the Fed cannot totally shift its focus away from its inflation target,” Williamson said.

Input prices for service providers grew at the fastest rate in a year, with firms noting the need to raise worker pay.

The S&P Global manufacturing index declined this month to the lowest level since June 2023. Bookings showed the largest monthly contraction since the end of 2022. As a result, factory employment shrank at the fastest pace in more than four years. According to the survey, a growing number of producers cited the need to slow operations due to weak sales.

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The service sector index of new business activity was little changed from the prior month. A measure of future activity slid to a two-year low and is down about 10 points from the start of the year.

Meanwhile in the euro zone, the two largest economies saw private-sector business activity slump in September. S&P Global data for the bloc showed that Germany’s manufacturing malaise worsened, while France suffered a plunge in services activity, unwinding a surprisingly strong boost from the Paris Olympics during the summer.

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