WASHINGTON >> U.S. services sector activity stalled in September amid a sharp slowdown in new orders, while subdued employment added to mounting evidence of sluggish labor market conditions because of sagging demand and supply of workers.

The survey from the Institute for Supply Management (ISM) today also showed a measure of prices paid by services businesses for inputs hovering near three-year highs last month. Signs of stagnating activity and elevated services inflation could complicate matters for the Federal Reserve, with financial markets expecting another interest rate cut this month.

The survey assumed more importance than usual after a lapse in funding forced a shutdown of the U.S. government early this week and delayed the release of the closely watched monthly employment repor

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