US ISM services PMI drops to 54.5% in October
CIE News ·
Confirmed by independent sources.
The US ISM Services PMI fell to 54.5% in October 2026, below forecasts of 54.8%, while the Prices Paid index remained high at 73.0% amid ongoing tariff and fuel pressures.
The US services sector expanded at a slower pace in October 2026 as the ISM Services PMI dropped to 54.5%, down 0.4 percentage points from September's 54.9%, according to a report published via PR Newswire by the Institute for Supply Management. The figure missed market expectations of 54.8%, as reported by tradingview.com, marking the lowest reading in three months despite staying in expansion territory for the 28th consecutive month.
Key sub-indexes pointed to moderating growth across business activities. The Business Activity Index decreased 2.7 percentage points to 53.8%, New Orders fell 3.9 percentage points to 55.9%, and the Inventories Index slipped 2.4 percentage points to 55.4%. In contrast, the Employment Index rose 1.3 percentage points to 51.4%, and the Supplier Deliveries Index climbed to 56.7%, reflecting slower delivery performance.
Inflationary indicators remained elevated, with the Prices Index reaching 73.0% and marking 23 consecutive months above 60%. Steve Miller, Chair of the ISM Services Business Survey Committee, noted that tariffs and fuel expenses remain the most commonly cited supply chain disruptions, warning that further pricing pressure may emerge if these cost escalations are passed along to consumers.
Key facts
- October Services PMI at 54.5%
- Forecast missed at 54.8%
- Prices Paid index at 73.0%
- Employment index rose to 51.4%
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