Services PMI and CPI track different things. The ISM Services PMI survey reports the direction of business activity and prices paid by service-sector organizations; the Consumer Price Index (CPI) measures how prices consumers pay for a weighted basket change over time. A Services PMI Prices Index reading of 74 is not 74% inflation.
As of October 7, 2026, ISM’s September report put the Services PMI at 54.9 and its Prices Index at 74.0. The latest available CPI-U reading was for August: up 3.4% over 12 months and 0.3% over one month, not seasonally adjusted. Those figures use different units and populations, so they cannot be compared as if they were equivalent inflation rates.
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What does the Services PMI measure?
The Institute for Supply Management’s Services PMI is a nationwide survey of purchasing and supply executives at service organizations. Respondents report whether conditions such as business activity and prices paid have increased, decreased, or stayed the same compared with the prior month. ISM describes its national survey as representing the entire United States; regional purchasing reports primarily represent their own areas and do not feed into the national result. Industry coverage is diversified by NAICS classification and industries’ contribution to GDP. ISM’s methodology overview explains the survey.
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The headline Services PMI is a diffusion index: a reading above 50 signals expansion, while a reading below 50 signals contraction. In September 2026, the index was 54.9, down from 55.4 in August. That reading indicates continued expansion in the surveyed service sector, not a percentage change in output or prices. ISM’s September report quotes Chair Steve Miller as saying, “In September, the Services PMI® registered 54.9 percent, a decrease of 0.5 percentage point compared to August’s figure of 55.4 percent.”
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What the Prices Index says
The Services PMI Prices Index is a separate diffusion index about prices respondents pay for materials and services. In September, it registered 74.0, up from 72.6 in August. In that survey, 50.3% of respondents reported higher prices, 47.5% reported no change, and 2.2% reported lower prices. The 74.0 reading summarizes the breadth of reported price increases; it does not mean businesses’ prices rose 74%, nor does it measure consumer inflation.
What does CPI measure?
The U.S. Bureau of Labor Statistics (BLS) defines CPI as the change over time in prices consumers pay for goods and services. BLS samples prices and weights items according to their importance in consumer spending, producing a price index for a defined population and representative basket. The broad CPI-U covers urban consumers; CPI-W covers a subset of wage earners and clerical workers. BLS’s CPI questions and answers describe the index and its populations.
The CPI is commonly reported as the percentage change in the index over a month or a year. The latest release available on October 7, 2026, covered August: CPI-U rose 3.4% over 12 months and 0.3% over one month, not seasonally adjusted. BLS scheduled the September CPI release for October 14, 2026, so September CPI figures were not yet available at that date. The BLS CPI release provides those figures and the release schedule.
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Services PMI vs. CPI: the practical differences
| Question | Services PMI and Prices Index | CPI |
|---|---|---|
| What is observed? | Survey respondents’ reported direction of business activity and prices paid | Sampled prices paid by consumers for a weighted basket |
| Whose experience is represented? | Purchasing and supply executives at service organizations in the national survey | Defined consumer populations, including urban consumers for CPI-U |
| How is it expressed? | Diffusion index; above 50 signals expansion for the headline index and a greater prevalence of rising prices for the Prices Index | Price index, commonly summarized as a monthly or annual percentage change |
| What does it say about inflation? | A timely, qualitative signal of reported business cost pressure; not a consumer inflation rate | Change in consumer prices for the covered basket |
| Latest reading on October 7, 2026 | September 2026: Services PMI 54.9; Prices Index 74.0 (ISM) | August 2026: CPI-U up 3.4% year over year and 0.3% month over month, not seasonally adjusted (BLS) |
Why can the ISM Prices Index and CPI move differently?
They measure separate populations and stages of pricing. The ISM index reflects what surveyed service organizations say about prices they pay for materials and services. CPI tracks prices consumers pay across a broader basket of goods and services. Businesses’ input costs do not necessarily pass through to consumer prices immediately or in full: companies may absorb cost increases, change prices later, or face consumer prices moving for reasons outside the services survey’s coverage.
Their scales also differ. A diffusion index summarizes how widely respondents report a direction of change; CPI’s monthly or annual percentage change quantifies the change in a consumer price index. A higher Prices Index can indicate that price increases are more widespread among respondents, but it does not tell you the percentage increase in those prices. Comparing 74.0 with 3.4% as if they were competing estimates of the same inflation rate is therefore a category error.
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Which indicator should you use?
- For consumer inflation: use CPI and choose the relevant population and time comparison. CPI-U is the broad measure for urban consumers; CPI-W covers wage earners and clerical workers.
- For business cost direction in services: use ISM’s Prices Index as a survey signal of whether surveyed organizations report prices paid rising, falling, or staying unchanged.
- For economic context: read the headline Services PMI and Prices Index alongside CPI, keeping their dates and units separate. They can complement one another, but neither substitutes for the other.
- For a household’s personal budget: treat CPI as a broad benchmark, not a personalized cost-of-living calculation; your spending mix may differ from the index basket.
How current are these figures?
The numbers above reflect releases available on October 7, 2026: ISM’s September 2026 Services report and BLS’s August 2026 CPI release. The ISM page title displays “September 2025,” while its report body and tables identify September 2026. The cited readings are from that report body; the title mismatch is worth keeping in mind when checking the source. BLS had scheduled September CPI for October 14, 2026.
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