2026.10.0514:03:02UTC+00US Services Growth Eases as Price Pressures Intensify

The ISM Services PMI slipped to 54.9 in September 2026 from 55.4 in August, slightly below market expectations of 55. Despite the decline, the index remained in expansionary territory for the 27th consecutive month, signaling ongoing growth in the US services sector. Business activity slowed more noticeably, with the Business Activity Index dropping to 56.5 from 61.7, while growth in new orders also moderated to 59.8.

Labor market conditions showed some improvement, as the Employment Index moved back above the 50 threshold to 50.1 after two months of contraction. Supply dynamics were mixed: supplier deliveries slowed, pushing the related index up to 53.2, and order backlogs strengthened to 56.6, their highest reading since July 2022.

Inflationary pressures remained pronounced. The Prices Index rose to 74, its highest level since July 2022, and remained above 70 for the sixth time in seven months, underscoring persistent cost concerns. External demand weakened, with export orders dropping sharply and slipping below 50 for the first time in eight months. Tariffs, elevated fuel costs, and ongoing supply-chain disruptions continued to be cited as key challenges for businesses.