The Institute for Supply Management reported Nov. 4 that U.S. services growth eased in October as new orders lost momentum and businesses continued to face rising input costs and slower deliveries.
The group’s Services Purchasing Managers’ Index fell to 54.5 from 54.9 in September. A reading above 50 indicates expansion. The sector has remained above that threshold for 28 consecutive months, according to ISM’s report.
Reuters reported that economists in its poll had expected a reading of 54.8. The new-orders index declined to 55.9 from 59.8, still signaling growth but at a slower pace.
Cost and delivery pressures persist
The prices index slipped to 73 from 74, indicating that purchasing costs continued to increase, not that prices fell. The index is a survey measure of the direction of change, not a percentage inflation rate.
Steve Miller, who chairs ISM’s services survey committee, said tariffs and fuel costs remained leading concerns for respondents. Many had not yet passed the full cost increases to customers, he said, warning of further pricing pressure unless those costs were mitigated.
The supplier-deliveries index rose to 56.7 from 53.2. A higher reading on that measure indicates slower deliveries. The order-backlog index reached its highest level since July 2022.
Employment provided a counterweight: Its index rose to 51.4 from 50.1, remaining in expansion territory for a second month. That measure reflects survey responses about staffing changes, not a count of jobs added.