US Services Sector Expands in October, ISM PMI Hits 54.5%
The ISM Services PMI rose to 54.5% in October, signaling continued expansion across key measures including new orders and employment.
Economic activity in the United States services sector continued to grow in October, according to the latest monthly survey from the Institute for Supply Management, with the headline Services PMI registering 54.5% — a reading above the 50% threshold that separates expansion from contraction.
The report's subindexes painted a broadly positive picture of sector health. The New Orders Index came in at 55.9%, reflecting sustained demand for services, while the Business Activity Index reached 53.8%. The Employment Index posted 51.4%, indicating modest but continued hiring among services firms. The Supplier Deliveries Index, which measures the pace at which suppliers fulfill orders — where higher readings signal slower deliveries and thus greater demand pressure — climbed to 56.7%.
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The findings are based on responses from purchasing and supply executives across the nation's services industries, a segment that encompasses the vast majority of the American economy, including sectors such as finance, healthcare, retail, and hospitality. A sustained reading above 50% signals that the services economy remains on an expansionary footing heading into the final months of 2026.
Analysts often watch the services PMI closely alongside its manufacturing counterpart, as the services sector accounts for the dominant share of US economic output and employment. Readings across all four reported subindexes holding above 50% suggest broad-based resilience, even as broader macroeconomic uncertainties persist.
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