The ISM Services PMI measures business activity in the service sector, which accounts for roughly 80% of U.S. GDP. Like the manufacturing PMI, readings above 50 indicate expansion and below 50 indicate contraction.

Why It Matters

Since services dominate the U.S. economy, this index often has a greater economic impact than the manufacturing PMI. It covers industries including healthcare, finance, retail, technology, and hospitality.

Key Components

Business Activity, New Orders, Employment, Supplier Deliveries, and Prices. The Prices component has become especially important as services inflation has been a major driver of overall inflation.

Market Impact

A strong services PMI supports the narrative of a resilient economy and can reinforce expectations for the Fed to maintain higher rates. A weak reading raises concerns about broader economic deterioration.

Release Schedule

Published on the third business day of each month by the Institute for Supply Management (ISM).