US Services Activity Rises the Most in 9-Months

The ISM Services PMI for the US steadied at 53.8 in January 2026, the same as a downwardly revised 53.8 in December and better than forecasts of 53.5. The reading pointed to another robust expansion in the services sector, with a faster increase seen for business activity/production (57.4 vs 55.2) while new orders (53.1 vs 56.5), employment (50.3 vs 51.7) and supplier deliveries (54.2 vs 51.8) slowed. Inventories (45.1 vs 54.2) and backlog of orders (44 vs 42.6) remained in contraction but price pressures increased (66.6 vs 65.1). "There was more respondent commentary in January on tariff impacts and uncertainty, potentially the result of annual contract renewals and geopolitical tensions. Gasoline and diesel fuel continued to be cited as commodities down in price. With the highest Business Activity and Supplier Deliveries index readings since October 2024, whether pricing increases will stick or expand needs to be closely watched”, according to Steve Miller, Chair of the ISM.

The ISM Services PMI for the US increased for a third consecutive month to 54.4 in December 2025 from 52.6 in November, well above forecasts of 52.3. The reading pointed to the strongest growth in the services sector since October 2024, with all subindexes in expansion territory for the first time since February. Companies frequently mentioned impacts related to the holiday season and activity increases related to end-of-year activities or preparation for 2026. Business activity/production (56 vs 54.5), new orders (57.9 vs 52.9) and inventories (54.2 vs 53.4) rose at a faster pace while a rebound was seen in employment (52 vs 48.9), new export orders (54.2 vs 48.7) and imports (50.3 vs 48.9). Also, price pressures eased slightly (64.3 vs 65.4) and the supplier deliveries index indicated slower performance (51.8 vs 54.1).

The ISM Services PMI for the US edged up to 52.6 in November 2025 from 52.4 in October, pointing to the strongest growth in the services sector in nine months, and above forecasts of 52.1. The continued expansion in both business activity (54.5 vs 54.3) and new orders (52.9 vs 56.2), and the highest backlog of orders since February (49.1 vs 40.8) are positive signs of an emerging recovery for the services sector. On the downside, tariffs and the government shutdown continue to be noted by companies as impacting both demand and costs. Employment remained in contraction (48.9 vs 48.2) while the highest supplier deliveries figure since October 2024 (54.1 vs 50.8) indicates slower deliveries by suppliers, likely due to air traffic disruptions from the government shutdown and customs impacts related to changing tariffs. Meanwhile, price pressures eased to the lowest in seven months (65.4 vs 70).