US ISM Services PMI ticked up to 52.6 in November from 52.4, beating expectations of 52.0 and marking the ninth expansionary reading of 2025. Business activity improved slightly from 54.3 to 54.5, but new orders dropped sharply from 56.2 to 52.6, signaling cooling demand. Employment also improved modestly, rising from 48.2 to 48.9, though it remained in contraction.
The most notable development came from the prices index, which fell from 70.0 to 65.4, the lowest level since April. While still elevated, the decline suggests that inflation pressures in the services sector—an area closely watched by the Fed—are easing. Together with weakening order growth, the data add to a picture of gradual cooling beneath the surface.
According to the ISM, November’s reading corresponds to an annualized 1.3% increase in real GDP, indicating that the services sector is still contributing positively to overall activity. However, the combination of softer new orders and easing prices reinforces expectations of slower momentum into year-end.
