US Services Growth Eases to 54.5 in October as Prices Stay High
The ISM Services PMI slipped from 54.9 in September to 54.5 in October, a 28th straight month of expansion, with softer orders and activity, a second month of hiring growth, and prices still very high at 73.0.
Key points
- US services firms grew again in October, at a slightly slower pace.
- The headline came in just below expectations.
- The move from September was small at the top line and bigger underneath it.
US services firms grew again in October, at a slightly slower pace. The ISM Services PMI registered 54.5 percent in October 2026, down from 54.9 percent in September, the Institute for Supply Management reported on Wednesday, November 4. A reading above 50 signals expansion, and October marked the 28th straight month of growth for the services sector.
The headline came in just below expectations. InvestingLive put the expected reading at 54.8, and Smart Investing and Trading put the forecast at 54.7. Both outlets reported the same headline and the same sub-index readings from the ISM October report, released at 10 a.m. ET.
The move from September was small at the top line and bigger underneath it. The headline fell 0.4 point. New orders fell 3.9 points, business activity fell 2.7 points, employment rose 1.3 points and prices fell 1.0 point. Read together, the October report showed demand cooling from a strong September, hiring still improving, and price pressure easing only slightly.
Orders and activity cool
New orders cooled the most. The new orders index fell to 55.9 percent from 59.8 percent in September. The business activity index fell to 53.8 percent from 56.5 percent. Both indexes stayed above 50, so orders and activity still grew, but at a slower rate than in September.
Hiring improves, prices stay high
Employment moved the other way. The employment index rose to 51.4 percent from 50.1 percent in September, a second straight month of employment growth in the survey.
Prices stayed the hard part of the report. The prices index eased to 73.0 from 74.0 in September, but it stayed very high, and ISM noted that no commodities were reported lower in price in October. InvestingLive reported no dollar reaction to the release.
What the survey measures
The ISM Services PMI is released at 10 a.m. ET on the third business day of the month. It is based on a survey of purchasing and supply executives at services firms, and the headline is a composite of business activity, new orders, employment and supplier deliveries. Services cover most of the US economy, from restaurants and hotels to retail, health care and transport, so the survey is watched as a broad check on demand outside factories.
October gave services firms a mixed month: growth for a 28th straight month, softer orders and activity, a second month of hiring growth, and prices that eased only a little from a very high level. A services reading above 50 for 28 straight months means the sector has grown through October without one month of contraction in that run, on the survey threshold of 50.
Timeline
- September 2026The ISM Services PMI stood at 54.9, with new orders at 59.8, business activity at 56.5, employment at 50.1 and prices at 74.0.
- October 2026The PMI eased to 54.5, the 28th straight month of expansion, with new orders at 55.9, business activity at 53.8, employment at 51.4 and prices at 73.0.
- Nov 4, 2026ISM released the October report at 10 a.m. ET, and InvestingLive and Smart Investing and Trading reported the same headline and sub-index readings.