US ISM Services PMI edges higher to 51.5 in August
ISM Services PMI rises to 51.5 in August, beating expectations
The Institute for Supply Management (ISM) reported that its Services PMI rose to 51.5 in August, above the market expectation of 51.1 and up from the previous reading of 50.3. This marks the second consecutive month of expansion in the US services sector after a brief contraction in June.
Growth in new orders and employment
The ISM Services PMI is a composite index based on a survey of purchasing managers in the services sector. The index measures the overall health of the sector, with a reading above 50 indicating expansion and a reading below 50 indicating contraction.
The increase in the Services PMI in August was driven by growth in new orders and employment. The New Orders Index rose to 53.0 in August from 51.8 in July, indicating an increase in demand for services. The Employment Index also rose, to 52.2 from 49.4, suggesting that businesses in the services sector are adding jobs.
Prices continue to rise
Despite the positive news on growth, the ISM Services PMI also showed that prices continued to rise in August. The Prices Index rose to 67.4 in August from 66.2 in July, indicating that businesses are paying more for goods and services.
Conclusion
The increase in the ISM Services PMI in August is a positive sign for the US economy. The sector accounts for about two-thirds of GDP and is a major source of jobs. The growth in new orders and employment suggests that businesses are optimistic about the future. However, the continued rise in prices is a concern, as it could put pressure on businesses and consumers and slow economic growth.
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