The U.S. services sector expanded at its fastest pace since February, signaling renewed momentum in the largest part of the economy. ISM Services PMI rose to 52.4 in October from 50.0, beating expectations of 50.8.
The report showed broad-based improvement, with business activity up to 54.3 from 49.9 and new orders surging to 56.2 from 50.4 — a clear sign that demand remains resilient. The employment index improved modestly to 48.2 from 47.2 but stayed in contraction, suggesting that service providers remain cautious about hiring.
However, the standout concern came from prices, which rose from 69.4 to 70.0, marking the highest reading since October 2022 and the 11th consecutive month above 60.0. That points to persistent inflationary pressure in the sector.
According to ISM, the October reading corresponds to roughly 1.2% annualized gain in U.S. GDP.
