US ISM Services PMI slipped significantly to 52.1 in November, down from October’s robust 56.0 and missing market expectations of 55.5. This marks a sharp deceleration in the service sector, which has been a key driver of economic resilience.
Key components of the report painted a picture of slower activity across the board. Business activity/production fell from 57.2 to 53.7, while new orders mirrored this decline, dropping to 53.7 from 57.4. Employment growth also softened, with the employment index easing from 53.0 to 51.5, indicating reduced hiring momentum. Prices index ticked up slightly, rising to 58.2 from 58.1, suggesting persistent cost pressures within the sector.
According to ISM, the current PMI reading corresponds to an estimated 1% annualized increase in real GDP. This suggests that while the services sector remains in expansion territory, its contribution to broader economic growth has slowed markedly.
