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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errorsU.S. services activity continued to expand in September 2026, but at a slower pace: the Institute for Supply Management’s Services PMI slipped to 54.9 from 55.4 in August. The sharper change was in input prices: ISM’s Prices Index climbed to 74.0, its highest reading since July 2022. That is a survey signal of widespread price increases paid by services businesses—not a consumer inflation rate.
What the September ISM Services PMI says
The headline Services PMI fell 0.5 percentage point to 54.9. ISM says a reading above 50 generally indicates expansion in the services sector, so September’s figure signals continued growth, not contraction. The result was slightly below the 55.2 median forecast among economists polled by Reuters.
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The PMI is a diffusion index: it summarizes whether surveyed businesses generally report improvement, deterioration, or no change compared with the prior month. It does not mean services output grew by 4.9%, nor does the 0.5-point monthly decline quantify a drop in output. ISM also notes that a level of 48.1 has historically corresponded, over time, with expansion in the overall U.S. economy; that is a historical relationship, not a guarantee about current GDP.
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| ISM index | September 2026 | Change or comparison | What it indicates |
|---|---|---|---|
| Services PMI | 54.9 | Down from 55.4 in August | Expansion continued, at a slower pace |
| Business Activity | 56.5 | Down 5.2 points | Activity remained in expansion, but momentum eased |
| New Orders | 59.8 | Down 1.1 points | Orders were still expanding |
| Employment | 50.1 | Above 50 after two months below it | Employment just returned to expansion territory |
| Supplier Deliveries | 53.2 | Up from 51.3 in August | Deliveries slowed; above 50 means slower deliveries |
| Backlog of Orders | 56.6 | Highest since July 2022 | Reported backlogs increased |
| New Export Orders | 46.9 | Below 50 | Export orders contracted |
Read the component indexes on their own terms. Activity and new orders were still expanding despite their declines; export orders were contracting. Employment was only just above 50. Supplier Deliveries is the exception to the usual direction: a reading above 50 means slower supplier performance, not expansion in deliveries.
Why are services prices rising?
ISM’s Prices Index rose 1.4 points to 74.0, the highest since July 2022. ISM said prices paid by services organizations had increased for a 112th consecutive month. In September, 50.3% of respondents reported higher prices, 47.5% reported no change, and 2.2% reported lower prices.
The index captures respondents’ reports of prices paid for materials and services. It is not the Consumer Price Index, a measure of prices paid by households, and it does not say that service prices rose 74%. The result shows that price increases were broadly reported among businesses in the survey, not their exact size or contribution to consumer inflation.
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Reuters connected the pressure with fuel costs and supply-chain strain, citing its sources. Those are possible contributing factors, not causes established by the ISM index itself. ISM panelists also mentioned longer lead times and tariff-related delays; these comments are individual reports and do not quantify how much any one factor drove the index.
How to interpret the survey—and its limits
ISM’s Services PMI combines four equally weighted components: Business Activity, New Orders, Employment, and Supplier Deliveries. Business Activity, New Orders, Employment, and Prices are seasonally adjusted; the composite includes Supplier Deliveries, whose above-50 interpretation is slower deliveries.
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The survey covers purchasing and supply executives across U.S. operations in a nationwide panel diversified across NAICS-based industries. Respondents compare conditions with the previous month, and results are weighted by each industry’s contribution to GDP. The indexes describe the breadth and direction of reported change; they are not direct measurements of output growth, jobs created, or inflation.
ISM Chair Steve Miller said the historical relationship between a September PMI of 54.9 and the broader economy “corresponds to a 2.1-percentage point increase in real gross domestic product (GDP) on an annualized basis.” This is ISM’s interpretation of the index’s past relationship with GDP, not a measured GDP result or a forecast from the government’s national accounts.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the employment and backlog readings may mean
The Employment Index’s return to 50.1 came alongside a Backlog of Orders reading of 56.6, its highest since July 2022. Miller said that with order backlogs and new orders remaining strong, companies may have little alternative but to add workers. That is his interpretation of the survey pattern, not evidence that every employer is hiring or that the index measures a specific number of jobs.
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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minuteISM’s October 6 roundup also noted that some firms had delayed hiring to manage labor costs. A small minority of comments mentioned AI-related restructuring or difficulty filling roles requiring AI qualifications; those anecdotes do not show that AI drove sector-wide employment changes.
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Sources
- Institute for Supply Management, September 2026 ISM Services PMI Report
- Institute for Supply Management, “ISM PMI Reports Roundup: September Services,” October 6, 2026
- Reuters, “US services sector cools in September, price pressures building,” October 5, 2026, via Investing.com
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