US Services Growth Eases in October

The S&P Global US Services PMI fell to 56.1 in October 2026, down from September’s near five-year high of 58.8 and below the preliminary estimate of 57.9. Nevertheless, the latest reading continued to signal robust growth in services activity, led by the technology sector, with solid performances also reported across consumer-facing industries and financial services. New business inflows increased sharply again, supported by positive market demand, while service providers continued to expand their workforces. However, growth in both business activity and new orders moderated from September’s recent highs amid elevated inflation and greater economic uncertainty. Meanwhile, operating expenses rose sharply, driven partly by higher fuel prices, prompting firms to increase their own selling prices at an even faster pace. Business confidence also weakened, falling to its lowest level since May.

The S&P Global US Services PMI eased to 57.9 in October 2026 from 58.8 in September and marginally below market forecasts of 58, according to a flash estimate. The latest reading marked the seventh straight month of growth in business activity, with the pace of expansion remaining among the strongest since 2011, despite a slight moderation from September. New business growth accelerated to its fastest pace since March 2022, supported by stronger domestic demand, while export orders recorded their largest increase since July 2023. Employment growth moderated compared with September but was still the third largest for over four years. However, price pressures intensified, with services inflation reaching its highest level since August 2022. This reflected a further sharp increase in business costs, driven by rising fuels, alongside higher wages and rising utility and insurance expenses. Business output expectations for the 12 months ahead cooled down from September's one-year high.

The S&P Global US Services PMI rose to 58.8 in September 2026 from 56.5 in August, slightly above the flash estimate of 58.7. The index has signalled sustained growth in business activity for six months, with the latest expansion the strongest since July 2021. Technology remained the strongest-performing sector, while growth also accelerated across consumer businesses, industrials and healthcare. New orders rose at their fastest rate in over four years, driven by strong domestic demand, while employment increased for a third consecutive month, with job creation at its fastest since June 2022. Strong new orders continued to outpace capacity, pushing backlogged work higher for the 19th consecutive month. Cost pressures intensified, with input costs rising sharply to their highest level since November 2022 amid higher gas and labour costs. Output prices also increased faster, with inflation the second-highest in just over a year. Business confidence strengthened to a one-year high.