Commentary Directory

US ISM Services PMI: September 2023

Jacob Hess
October 04, 2023

US ISM Services PMI

10/4/2023 (September 2023)

53.6 (-0.9 pts)


Link Icon Toggle Icon


Business Activity Index 58.8 (+1.5 pts)
New Orders Index 51.8 (-5.7 pts)
Price Index 58.9 (0.0 pts)

In September, the Services PMI registered at 53.6%, marking the ninth consecutive month of expansion in the services sector, according to the latest Services ISM Index. Although this figure is slightly lower than August's 54.5%, it indicates sustained growth in the sector, which has expanded in 39 of the last 40 months. The report also highlighted a 1.5 pt increase in the Business Activity Index (58.8) and a -5.7 pt drop in the New Orders Index (51.8). Supplier Deliveries Index entered the expansion territory for the first time since November 2022 at 50.4 (+1.9 pts). Meanwhile, the Prices Index remained stable at 58.9, and the Inventories Index saw a slight decline to 54.2 (-3.5 pts). Despite some pullback in the rate of growth, mainly in New Orders and Employment indexes, the majority of respondents are optimistic about business conditions, although some expressed concerns about potential headwinds.

From ISM

The services sector continues to expand but at a softer rate. As expected, the cooling of this part of the economy is happening gradually, mirroring the pace of the loosening of the labor market. What sticks out of the subindexes is that business activity is still seeing robust growth even as new orders growth pulls back. As a result, services firms still find the ability to increase prices for the 76th straight month in a row. Thus, the Fed still has something to push back against.