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US ISM services rise on demand strength, hiring stays weak in August
The ISM Services index came in at 55.4, while employment remained in contraction at 47.8, and prices jumped to the highest level since August 2022.
US services activity improved more than expected in August, with the ISM PMI Services index climbing from 54.1 to 55.4, topping the 54.3 consensus and extending a 26th consecutive month of expansion, Action Forex reported.
Demand indicators led the increase, with Business Activity rising from 59.1 to 61.7 and New Orders surging from 57.2 to 60.9 to multi-year highs, while backlogs also accelerated, signaling stronger underlying momentum.
Labor conditions stayed the weak spot. Employment improved only marginally from 47.4 to 47.8 and remained in contraction for a second straight month, suggesting services firms were reluctant to add headcount despite healthier orders.
Price pressures intensified as well, with the Prices index increasing from 70.3 to 72.6, the highest level since August 2022. Action Forex said the data sent a mixed but inflationary signal by showing demand acceleration alongside contraction in services employment, making Friday’s NFP an important read on whether weak hiring is broadening.