US ISM Services PMI edged higher in August, ticking up from 51.4 to 51.5, in line with expectations. While the headline figure suggests continued expansion, some underlying components showed mixed results. Business activity and production declined from 54.5 to 53.3, and employment slipped from 51.1 to 50.2. On the positive side, new orders rose from 52.4 to 53.0, and prices paid by service providers increased from 57.0 to 57.3.
ISM noted that “ten industries reported growth in August,” and that the Services PMI has expanded in 18 of the last 20 months since January 2023. The August reading aligns with the 2024 average for the index, standing at 51.5.
According to ISM, the relationship between the Services PMI and the overall economy suggests that the August reading corresponds to a 0.8% annualized increase in real GDP. This modest uptick signals ongoing, though limited, growth in the US service sector, which remains a key driver of the economy despite broader uncertainties.
