ISM: Services Grew 6th Month, Hiring Slips
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- ISM services index rose to 54.1% in July from 54.0% in June, marking the sixth consecutive month of expansion with 13 of 18 tracked service industries reporting growth.
- Prices index stayed above the 70% threshold for the fifth time in six months — a level typically associated with high inflation pressure that the article notes far exceeds readings during low-inflation periods.
- Employment gauge slid below 50% into contraction territory for the fourth time in five months, with healthcare the only service industry adding significant jobs.
- New orders rose in July and pointed to higher sales in the months ahead, per the ISM survey.
- Construction industry executive told ISM there are "mounting cost pressures from all fronts," while a wholesale trade executive said business is "more robust than expected."
- Steven Miller, chair of the ISM services survey, said the services economy "continues to be resilient" but flagged ongoing inflation concerns.
- Dow Jones Industrial Average and S&P 500 both rose to new record highs in Wednesday trading following the report's release.
Why it matters: The headline 54.1% reading confirms expansion, but the underlying data exposes a split: with the prices index above 70% for the fifth time in six months and employment contracting in four of five months, businesses are offsetting costs by freezing hiring outside healthcare. Stocks shrugged it off and hit records, yet a near-broad hiring pullback across the services sector that drives most U.S. growth could weigh on consumer spending if it persists.
