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1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problemsThe ISM Services PMI is a monthly survey-based indicator of whether activity across U.S. service businesses is broadly improving or weakening. A reading above 50 generally signals expansion and one below 50 generally signals contraction—but the index is not a percentage growth rate, and Supplier Deliveries uses the opposite directional convention. The latest available report, for September 2026, put the headline at 54.9.
What the ISM Services PMI measures
The Institute for Supply Management (ISM) surveys purchasing and supply executives about changes in their organizations’ U.S. services operations from one month to the next. Its Services Business Survey Panel spans service industries classified under the North American Industry Classification System (NAICS), with data weighted by each industry’s contribution to GDP. The national report covers the United States; regional purchasing reports are separate and do not feed into it. ISM describes responses as raw data that are not changed. ISM’s Services Report methodology and report
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The result is a diffusion index: a summary of the direction and breadth of reported change, rather than a direct measure of output or growth. As ISM puts it, “Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change.”
How ISM calculates the headline
The Services PMI combines four equally weighted diffusion indexes: Business Activity, New Orders, Employment, and Supplier Deliveries. The first three are seasonally adjusted; Supplier Deliveries is not. ISM’s 2026 instructions calculate each unadjusted index to one decimal place, divide by the projected seasonal factor where applicable, round each quotient to one decimal place, and average the four. Rounding can make a hand-calculated result differ from the published headline. ISM 2026 seasonal adjustment factors and calculation instructions
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The seasonal factors account for recurring effects such as weather, institutional arrangements, and non-movable holidays. ISM’s 2026 factors took effect with January reports. The organization used X-13-ARIMA for revisions covering January 2023 through December 2025 and for projected 2026 factors; it plans to recalculate the 2026 factors once actual data are available in early 2027.
What the component indexes tell you
The report includes several indexes beyond the four used to calculate the headline. They add context, but they do not all enter the Services PMI.
- Business Activity: Reports the direction of activity at respondents’ organizations. It is a component of the headline, but it is not the headline itself.
- New Orders: Signals the direction of incoming demand and is another headline component.
- Employment: Tracks the direction of employment changes reported by respondents; it does not state the percentage change in service-sector jobs.
- Supplier Deliveries: Tracks whether deliveries are becoming slower or faster. Its directional interpretation is reversed relative to the other components.
- Prices: Indicates the direction and breadth of reported price changes. It is not included in the headline.
- Other context indexes: Backlog of Orders, New Export Orders, Inventory Change, Inventory Sentiment, and Imports are also reported, but are not part of the four-index headline formula.
How to interpret readings above or below 50
For the headline and most component indexes, a reading above 50 generally means more respondents reported an increase than a decrease compared with the previous month; below 50 generally means the reverse. A reading’s distance from 50 describes the breadth and direction of reported change, not the percentage by which output, orders, hiring, or prices changed. A decline in the index can still indicate expansion if it remains above 50—just a less widespread or weaker expansion signal than before.
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The Supplier Deliveries exception
Supplier Deliveries runs in the opposite direction: above 50 means slower deliveries, while below 50 means faster deliveries. A higher value is therefore not simply a better performance reading. ISM’s September 2026 report said deliveries had slowed for the 22nd consecutive month.
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The separate 48.1 threshold
ISM also cites 48.1 as a historical threshold for the Services PMI’s relationship with the overall economy: over time, readings above it generally correspond to GDP expansion, and readings below it generally correspond to GDP decline. This is a separate, historical relationship and should not replace 50 as the ordinary dividing line for expansion or contraction in the services-sector index.
What the September 2026 report showed
The September report recorded a Services PMI of 54.9. The components show why it is useful to read the headline alongside the details: New Orders remained strong, Employment was barely above the expansion line, and Supplier Deliveries indicated slower performance.
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| Index | September 2026 | Change from August 2026 | Interpretation in ISM’s report |
|---|---|---|---|
| Services PMI | 54.9 | not stated | Above 50, indicating services-sector expansion |
| Business Activity | 56.5 | Down 5.2 points | Expansion |
| New Orders | 59.8 | Down 1.1 points | Expansion for 16 consecutive months |
| Employment | 50.1 | Up 2.3 points | Returned to expansion |
| Supplier Deliveries | 53.2 | Up 1.9 points | Slower deliveries for the 22nd consecutive month |
| Prices | 74.0 | Up 1.4 points | More respondents reported higher than lower prices; prices paid increased for the 112th consecutive month |
All readings and month-to-month changes in the table are from ISM’s September 2026 report. These are diffusion-index points, not percentage changes in economic output, jobs, or prices. In particular, Prices at 74.0 does not mean inflation was 74 percent. ISM September 2026 Services PMI report
ISM said the 54.9 reading corresponded, based on its historical relationship with the overall economy, to a 2.1 percentage-point increase in real GDP on an annualized basis. That is ISM’s model-based relationship statement, not a Bureau of Economic Analysis estimate or a direct measurement of September GDP.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.A practical way to read each monthly release
- Start with the headline and its change. Check whether the Services PMI is above or below 50, then note whether it rose or fell from the previous month. A falling reading above 50 still signals expansion.
- Check demand. New Orders helps show whether incoming business is strengthening or weakening.
- Look at Employment separately. Note whether it is above or below 50 rather than treating the headline as a hiring measure.
- Reverse the usual interpretation for deliveries. Above 50 means slower supplier deliveries; below 50 means faster deliveries.
- Use Prices as an input-cost signal, not an inflation rate. It is a separate index and is not included in the headline.
- Compare the pattern across components and industries. This can help distinguish a broad shift from one concentrated in particular parts of the report.
When the report is released—and what it cannot tell you
ISM sends the survey in the first part of each month, collects responses through most of the month, and releases the report on the third business day of the following month. The results capture respondents’ assessments of changes in their own organizations. They are useful as a timely directional signal, but they are not a substitute for official output, employment, or inflation statistics; ISM advises readers to compare the report with other economic data when making decisions.
Comparisons with the ISM Manufacturing PMI or a PMI from another provider also require care: survey coverage, component definitions, weighting, and threshold conventions may differ.
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