PMI rose in August
Washington — Service sector growth in the US accelerated more than expected in the month of August, the Institute for Supply Management revealed in a report released on Thursday.
The ISM said its services PMI rose to 55.4 in August from 54.1 in July, with a reading above 50 indicating growth. Economists had expected the index to inch up to 54.3.
With the bigger than expected increase, the services PMI reached its highest level since hitting 56.1 in February.
The advance by the headline index partly reflected a notable acceleration in the pace of growth in new orders, as the new orders index surged to 60.9 in August from 57.2 in July, reaching its highest level since February 2023.
The business activity index also shot up to 61.7 in August from 59.1 in July, jumping to its highest reading since November 2022.
PMI rose in August
The report said the employment index also inched up to 47.8 in August after tumbling to 47.4 in July, although the reading below 50 indicates the second straight month of contraction.
The ISM also said the prices index jumped to 72.6 in August from 70.3 in July, breaking the 70% threshold for the fifth time in six months and hitting its highest level since August 2022.
A separate report released by the ISM on Tuesday showed a modest slowdown in the pace of growth in US manufacturing activity in the month of August.
The ISM said its manufacturing PMI dipped to 54.6 in August from 55.6 in July, although a reading above 50 still indicates growth. Economists had expected the index to edge down to 55.2.
The modest pullback by the manufacturing PMI came a month after it reached its highest level since hitting 55.9 in May 2022.
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Notes from APS Radio News
The Purchasing Managers’ Index (PMI) is an economic indicator that assesses the business environment by surveying purchasing managers at private-sector companies about their expectations for orders, production, employment, and supplier deliveries.
