The ISM Services PMI tracks activity in the service side of the U.S. economy. Because services dominate output and employment, this release often says more about domestic demand than the manufacturing PMI.
What to Check First
Reading the Signal
Services PMI rarely collapses without a broader growth problem, so a move toward the low-50s can matter even before it crosses below 50. The prices component is especially important when markets are focused on sticky services inflation. Strong activity with easing prices is healthy; strong activity with rising prices can become a Fed problem.
Market Impact
A resilient services PMI can support equities tied to domestic demand, but it may also lift yields if inflation pressure stays firm. A weak reading raises slowdown concerns and can support bonds, especially if employment and new orders weaken together.