Calendar › ISM services PMI › 2026-11-04

ISM Services 54.5 vs 54.8 Est — Backlogs Highest Since 2022, S&P Final Cut to 56.1

Fundamentals · 2026-11-04

ISM Services PMI 54.5 vs 54.8 est (prior 54.9), a 28th month of expansion; Business Activity 53.8 (−2.7); New Orders 55.9 (−3.9); Employment 51.4 (+1.3), above 50 for a second month; Supplier Deliveries 56.7 (+3.5), slowest since April; Prices 73.0 (−1.0), a 113th straight month of increases and above 70 for the seventh time in eight months; Backlog of Orders 58.0, the highest since July 2022; New Export Orders 55.2 (+8.3), back in expansion; all 10 indexes above 50 for the first time since February; no commodity down in price; S&P Global final Services Business Activity 56.1 vs 57.9 flash, from 58.8; Composite 55.9 vs 57.6 flash, a three-month low; S&P services charges up the most since July and composite charges the most since August 2022; S&P business confidence the lowest since May; S&P survey window 9-28 October.

What It Changes

• Both services surveys say growth cooled in October, and neither says prices did. ISM's headline missed by 0.3 on weaker activity and orders. S&P Global's final services reading was cut 1.8 points from the flash.
• The cost side held. ISM prices paid eased only a point to 73.0, 17 industries paid more and none paid less, and Miller says many firms have not yet passed their fuel and tariff costs on.
• Capacity is getting tighter, not looser. ISM backlogs hit their highest since July 2022 and deliveries slowed sharply. That is the mix that lets firms raise prices even as new business slows.
• For December, it does not settle the argument. A softer headline helps the case for holding. Prices above 70 with backlogs building help the two members who voted to hike last week.

Impact

• USD — Mixed — weaker activity and a big downward revision trim the growth case, but a prices index still above 70 keeps the hike case from losing ground.
• DXY +0.04% from 09:44 to 09:59 ET around the S&P Global final and +0.06% from 09:59 to 10:10 ET around ISM, small moves against a −0.38% day at 10:10 ET driven by the overnight election result.
• The headline miss is small and came from activity and orders. The parts of the report the Fed reads for inflation, prices and backlogs, did not soften with it.
• US Indices (ES / NQ / YM / RTY) — Mixed, lean bearish — slower demand growth with costs still rising is a margin headwind, and nothing here gives the rate path a reason to ease.
• From 09:44 to 09:59 ET, around the S&P Global final: ES −0.06%, NQ +0.01%, YM −0.25%, RTY −0.71%. From 09:59 to 10:10 ET, around ISM: ES +0.06%, NQ +0.24%, YM −0.07%, RTY −0.31%. On the day at 10:10 ET: ES +1.76%, NQ +2.03%, YM +2.10%, RTY +1.17%, almost all of it from the overnight election rebound.
• The split across the two releases is the read. RTY lost 1.02% from 09:44 to 10:10 ET while NQ gained 0.25%, small caps selling on the weaker services demand as tech held up.
• RTY has the most direct exposure. Small caps are the domestic-services trade, and ISM's activity index fell 2.7 points while S&P Global's was cut 1.8 from its flash.
• NQ still has its own support. Information was among the fastest-growing industries, memory products are up in price for a 10th month, and all three items in short supply are computer-related.
• Gold (GC) — Slight bearish — sticky services prices work against gold through real yields, but the release adds little to a day driven by the dollar. GC −0.23% from 09:44 to 09:59 ET and −0.09% from 09:59 to 10:10 ET, still +2.61% on the day.

Inside The Number

The ISM Services PMI registered 54.5 in October, 0.4 below September's 54.9 and 0.3 below a 54.8 consensus (TradingEconomics). It is a 28th straight month of expansion and 0.2 above the 12-month average of 54.3, which has now risen for 10 months running. ISM maps it to a 2.0-percentage point annualized rise in real GDP, down from 2.1 in September.

Demand slowed. Business Activity fell 2.7 points to 53.8, 2.9 under its 12-month average of 56.7. The share of firms reporting higher activity dropped to 20.8% from 30.9%, while the share reporting lower barely moved (11.4% against 12.4%), so the fall came from firms moving to "no change", not from firms cutting. New Orders fell 3.9 points to 55.9, a 17th month of growth but the weakest of the last four months, with 26.1% reporting higher orders against 31.4% in September. Construction was the only industry with lower new orders, for a third month. One respondent explained why: "Excess speculative home inventory must sell before we can start new ones."

The headline would have fallen further without slower deliveries. ISM's headline is the equal-weighted average of four subindexes, so the move decomposes exactly. Business Activity took 0.675 off and New Orders 0.975. Employment added 0.325 and Supplier Deliveries 0.875, and the deliveries index counts as a positive only because it is inverted. Without it, the other three average 53.7, down from 55.5 in September.

Prices eased a point and stayed hot. The Prices Index registered 73.0, down from 74.0. It is a 113th consecutive month of rising prices, above 70 for the seventh time in eight months, and above 60 for 23 months. Its 12-month average rose to 69.2, the highest since April 2023. 48.6% of firms paid more, against 50.3% in September, and the share paying less rose to 4.0% from 2.2%. Seventeen industries paid more and none paid less. No commodity was reported down in price. Fuel and gasoline are up for a ninth month, diesel an eighth, memory products a 10th and copper an 11th.

Miller's warning is about the pipeline. He says tariffs and fuel were again the most-cited supply chain issues, and that many respondents are not yet seeing the full cost or have not passed it on. In his words, "more pricing pressure is on the way" if oil and tariff costs are not mitigated, even if they stop rising. One Information respondent described exactly that: fuel costs have cut margins because the firm has not passed them on, believing the condition is short-term.

Capacity is the hidden story. Backlog of Orders rose 1.4 points to 58.0, the highest since July 2022 (58.3), in a ninth month of expansion, the longest run since a 26-month streak ended in February 2023. Supplier Deliveries rose 3.5 points to 56.7, the second-slowest reading since July 2022, behind only April 2026's 56.8. The share of firms reporting slower deliveries jumped to 15.7% from 8.8%, and no industry reported faster deliveries. Orders are arriving faster than firms can complete them, even as the pace of new orders slows.

Hiring improved, narrowly. Employment rose 1.3 points to 51.4, a second month above 50 and 2.1 above its 12-month average. Underneath it, 16.6% of firms added staff and 13.5% cut, and only six industries added staff against seven cutting. Miller says the second reading above 50 "may indicate help is on the way" for backlogs and slow deliveries.

Breadth widened. Fifteen industries grew in October, two more than September, and only Construction and Health Care & Social Assistance contracted. For the first time since February 2026, all 10 ISM services indexes were above 50. New Export Orders rose 8.3 points to 55.2 after one month in contraction, and Imports rose 1.3 to 54.2.

S&P Global's final told a weaker story than its flash. The Services Business Activity Index was 56.1, down from 58.8 and 1.8 points under the 57.9 flash that was also the consensus. The Composite was 55.9, down from 58.4 and 1.7 under the 57.6 flash, a three-month low. Services output has now grown for seven months, new business still rose sharply, and export business grew at the best pace since mid-2023. But hiring slowed to its weakest since July, from September's 51-month peak, and business confidence fell to its lowest since May, which firms tied to inflation, client budgets and uncertainty about federal policy.

S&P's price detail ran the other way to its growth detail. Services input cost inflation eased from September's near four-year peak but stayed above its 2026 average, driven by fuel and the food and transport costs that follow it. Services charges rose at the fastest pace since July, and across the whole private sector output charges rose the most since August 2022. Chris Williamson called it "yet another worrying intensification of inflationary pressures" and said the overall signal is for inflation to rise further above the Fed's target in the coming months.

Against the running story. The Fed held at 3.75%-4.00% on 28 October, with two members voting to hike, and left December open. Monday's ISM manufacturing had prices easing to 75.2, and the S&P Global final manufacturing PMI was cut 1.1 points from its flash for a second month. October's surveys now share a pattern across both sectors: the flash overstated activity, and the price gauges stayed high.

The Internals

ISM's side-by-side of the two sectors, October 2026. The first five rows are the services headline and the four subindexes that make it up:

Index · Services Oct · Services Sep · Change · Direction · Trend, months · Mfg Oct · Mfg Sep · Mfg change

Headline PMI · 54.5 · 54.9 · −0.4 · Growing, slower · 28 · 55.5 · 54.5 · +1.0

Business Activity or Production · 53.8 · 56.5 · −2.7 · Growing, slower · 28 · 59.0 · 56.7 · +2.3

New Orders · 55.9 · 59.8 · −3.9 · Growing, slower · 17 · 55.5 · 55.3 · +0.2

Employment · 51.4 · 50.1 · +1.3 · Growing, faster · 2 · 52.4 · 52.7 · −0.3

Supplier Deliveries · 56.7 · 53.2 · +3.5 · Slowing, faster · 23 · 59.1 · 59.0 · +0.1

Inventories · 55.4 · 57.8 · −2.4 · Growing, slower · 9 · 51.4 · 48.6 · +2.8

Prices · 73.0 · 74.0 · −1.0 · Increasing, slower · 113 · 75.2 · 77.9 · −2.7

Backlog of Orders · 58.0 · 56.6 · +1.4 · Growing, faster · 9 · 54.6 · 56.4 · −1.8

New Export Orders · 55.2 · 46.9 · +8.3 · Growing, from contracting · 1 · 51.2 · 50.9 · +0.3

Imports · 54.2 · 52.9 · +1.3 · Growing, faster · 4 · 52.9 · 51.0 · +1.9

Inventory Sentiment · 52.1 · 51.7 · +0.4 · Too high, faster · 42 · n/a · n/a · n/a

How the headline moved. September's unrounded headline was 54.900 and October's is 54.450, a fall of 0.450:

Subindex · Change · Contribution to the headline · Read

Business Activity · −2.7 · −0.675 · Fewer firms reporting higher activity

New Orders · −3.9 · −0.975 · Largest drag

Employment · +1.3 · +0.325 · Second month above 50

Supplier Deliveries · +3.5 · +0.875 · Inverted: slower deliveries added to the headline

Total · n/a · −0.450 · Matches 54.9 to 54.5

Response distributions, October against September:

Index · % Higher · % Same · % Lower · Index · September % Higher · September % Lower

Business Activity · 20.8 · 67.8 · 11.4 · 53.8 · 30.9 · 12.4

New Orders · 26.1 · 64.9 · 9.0 · 55.9 · 31.4 · 10.5

Employment · 16.6 · 69.9 · 13.5 · 51.4 · 16.5 · 16.2

Prices · 48.6 · 47.4 · 4.0 · 73.0 · 50.3 · 2.2

Backlog of Orders · 24.9 · 66.2 · 8.9 · 58.0 · 21.5 · 8.3

New Export Orders · 20.5 · 69.3 · 10.2 · 55.2 · 8.2 · 14.4

Supplier Deliveries (slower / faster) · 15.7 · 81.9 · 2.4 · 56.7 · 8.8 · 2.5

The Prices Index, last four months:

Month · % Higher · % Same · % Lower · Index

Oct 2026 · 48.6 · 47.4 · 4.0 · 73.0

Sep 2026 · 50.3 · 47.5 · 2.2 · 74.0

Aug 2026 · 44.8 · 52.9 · 2.3 · 72.6

Jul 2026 · 44.7 · 52.1 · 3.2 · 70.3

Where the standout readings stand:

Measure · October 2026 · Standing

Backlog of Orders · 58.0 · Highest since July 2022 (58.3)

Backlog streak · 9 months · Longest since a 26-month run ended February 2023

Supplier Deliveries · 56.7 · Second-slowest since July 2022, behind April 2026 (56.8)

Prices · 73.0 · Above 70 in 7 of the last 8 months, above 60 for 23

Prices, 12-month average · 69.2 · Highest since April 2023

Employment · 51.4 · Second month above 50, 2.1 above its 12-month average

Indexes in expansion · 10 of 10 · First time since February 2026

Services PMI, 12-month average · 54.3 · 10th straight monthly increase

Implied real GDP · 2.0pp annualized · Down from 2.1pp in September

The last 12 months of the ISM Services PMI:

Month · Services PMI

Oct 2026 · 54.5

Sep 2026 · 54.9

Aug 2026 · 55.4

Jul 2026 · 54.1

Jun 2026 · 54.0

May 2026 · 54.5

Apr 2026 · 53.6

Mar 2026 · 54.0

Feb 2026 · 56.1

Jan 2026 · 53.8

Dec 2025 · 53.8

Nov 2025 · 52.4

S&P Global's final October readings, published at 09:45. S&P Global does not publish sub-index values in the release text, so the descriptive rows record what the release says:

Measure · Final October · Flash October (23 Oct) · September final

Services Business Activity Index · 56.1 · 57.9 · 58.8

Composite Output Index · 55.9 · 57.6 · 58.4

Services activity · Up 7th month, slower · Slower · Sharpest since July 2021

Services new business · Sharp, slower than September · Strongest since March 2022 · Fastest in 4.5 years

Services export business · Up 3rd month, best since mid-2023 · Largest since July 2023 · Rising

Services employment · Up 4th month, weakest since July · Third-largest gain in over 4 years · 51-month peak

Services backlogs · Up 20th month, steepest in 4.5 years · Fastest since May 2022 (both sectors) · Sharpest in almost 4.5 years

Services input costs · Easing, above the 2026 average · n/a · Near four-year peak

Services output charges · Fastest since July · Steepest since August 2022 · Second-fastest in just over a year

Composite output charges · Fastest since August 2022 · Sharpest since August 2022 · n/a

Business confidence · Lowest since May · n/a · One-year high

Flash to final, services and composite:

Month · Services flash · Services final · Revision · Composite flash · Composite final · Revision

September 2026 · 58.7 · 58.8 · +0.1 · 58.4 · 58.4 · 0.0

October 2026 · 57.9 · 56.1 · −1.8 · 57.6 · 55.9 · −1.7

Against consensus (TradingEconomics):

Release · Actual · Consensus · Surprise · Prior

ISM Services PMI · 54.5 · 54.8 · −0.3 · 54.9

S&P Global Services PMI final · 56.1 · 57.9 · −1.8 · 58.8

S&P Global Composite PMI final · 55.9 · 57.6 · −1.7 · 58.4

Where The Two Surveys Agree And Disagree

Variable · ISM · S&P Global · Verdict

Activity · 53.8, down 2.7 · 56.1, down from 58.8 · Agree, slower

New orders · 55.9, down 3.9 · Sharp, slower than September · Agree, slower

Backlogs · 58.0, highest since July 2022 · Steepest in 4.5 years · Agree

Input prices · 73.0, down 1.0 · Easing from a near four-year peak · Agree, high and slightly lower

Selling prices · Not measured · Services fastest since July · S&P only

Employment · 51.4, up 1.3 · Weakest since July · Disagree on direction

Exports · 55.2, back in expansion · Best since mid-2023 · Agree, reconciled from September

Implied growth · 2.0pp real GDP annualized · Over 4% annualized, both sectors · Both positive, S&P far stronger

ISM's industry breadth:

Measure · Industries up · Industries down · Notable

Headline · 15 · 2 · Contracting: Construction; Health Care & Social Assistance

Business Activity · 13 · 2 · Down: Construction; Real Estate, Rental & Leasing

New Orders · 15 · 1 · Construction the only decline, third month running

Employment · 6 · 7 · Cutting includes Management of Companies, Health Care, Construction

Prices · 17 · 0 · No industry reported lower prices

Supplier Deliveries (slower / faster) · 14 · 0 · No industry reported faster deliveries

New Export Orders · 6 · 5 · Seven industries reported no change

Commodities, as listed by ISM:

List · Items

Up in price · Copper (11 months), memory products (10), fuel (9), gasoline (9), software licensing (9), diesel fuel (8), steel products (7), petroleum-based products (6), food products (3), labour (2), wire and cable (2), aluminum, chicken, equipment and parts, HDPE, insurance, construction labour, software maintenance, vehicles

Down in price · None

Short supply · Memory components (10), wire and cable (5), computers and related products (2)

What The Firms Actually Said

• Tariffs are reshaping costs. Wholesale Trade said Section 301 duties in force since late July replaced the expired flat tariff and raised duties on Southeast Asian canned and dry goods. Retail Trade: "Tariffs are causing havoc with international merchandise sourcing."
• Fuel is still the common thread. Accommodation & Food Services tied fuel, freight and fertilizer costs to wheat up 30% year over year. Management of Companies said tariffs, fuel and longer lead times "are becoming more challenging" even with activity strong.
• Some firms are absorbing costs for now. Information said fuel has cut its margins because it has not passed the expense on, believing the condition is short-term. This is the gap Miller expects to close.
• Deliveries are slipping. One Supplier Deliveries respondent reported vessel and supplier schedule slips of weeks to months, forcing earlier ordering and more rescheduling.
• Power demand is strong. Utilities: "Generation demand is strong," with supplies constrained and nuclear uprates facing regulatory headwinds.
• Construction is waiting on rates. Construction reported a strong backlog of institutional and commercial projects, but said higher financing costs are making owners evaluate budgets and schedules closely.
• On S&P's side, firms reported positive demand and some success turning enquiries into contracts, but tied their lower confidence to affordability, interest rates and the political environment.

Against This Morning's Open

• The Open listed the S&P Global services final at a 57.9 consensus, the composite at 57.6, and ISM services at 54.8 against a 54.9 prior. It said "ISM services prices at 10:00 feeds the December hike debate" and that a firm ISM services print would test gold's bid.
• The print was not firm. ISM missed by 0.3 and the S&P final came in 1.8 under the flash. The prices index eased to 73.0, so it gave the hike debate neither a new high nor a clear retreat.

What This Sets Up

• Next ISM Services: November data, Thursday 3 December at 10:00 ET. S&P Global's November flash comes later this month, and its final follows in early December.
• What would confirm the read: prices staying above 70 for an eighth time in nine months with backlogs still near 58. That would say capacity strain is keeping pricing power intact while demand cools.
• What would break it: backlogs and deliveries easing back toward their 12-month averages while prices fall into the 60s. That would say October's strain was a supply delay passing through, not a demand surplus.
• The flash test: a second big flash-to-final cut in services, after manufacturing's two, would say S&P Global's flash is running hot across the board in this cycle.

What Is This?

• What it is: Two surveys of the US service sector. S&P Global's final US Services PMI comes out at 09:45 ET from a panel of about 400 companies across consumer services (excluding retail), transport, information, communication, finance, insurance, real estate and business services; this month's data were collected 9-28 October and finalize the 23 October flash. ISM's Services PMI follows at 10:00 ET on the third business day of the month, from purchasing and supply executives across 18 industries, weighted by each industry's share of GDP.
• Why it matters: Services are most of the US economy and most of core inflation. With the Fed holding at 3.75%-4.00%, two members voting to hike and December open, the price gauges in these two surveys are the earliest monthly read on whether services inflation is building or fading.
• How to read it: Both are diffusion indexes: the share of firms reporting higher plus half the share reporting no change, so above 50 means an increase on the month. ISM's headline is the equal-weighted average of Business Activity, New Orders, Employment and Supplier Deliveries, with deliveries inverted, so slower deliveries raise it; ISM says a reading above 48.1 over time is consistent with a growing economy. S&P Global's headline is its Business Activity Index alone, and the flash-to-final revision shows how much the late responses changed the picture.

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_For informational purposes only. Not investment advice._