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Markets · November 4, 2026 · 2 min read

October ISM Services PMI eases to 54.5%; prices and delivery delays stay elevated

By Econ Data Tools Editorial Team

Published November 4, 2026 • Updated November 4, 2026

Services expanded for a 28th month, with slower orders and activity but stronger employment. A high prices index and slower deliveries temper the headline growth reading.

ISM reported on November 4 that its Services PMI registered 54.5% in October, down 0.4 percentage point from 54.9% in September. The index remained above the 50% threshold that separates expansion from contraction in the services sector, marking its 28th consecutive month in expansion territory. The Business Activity Index fell 2.7 percentage points to 53.8%, and New Orders fell 3.9 points to 55.9%. Both still indicated expansion, but at a slower pace than in September. Fifteen industries reported growth and two reported contraction; these are industry counts within the survey, not counts of individual companies. Employment rose 1.3 percentage points to 51.4%, its second consecutive month above 50%. The headline expansion therefore coexisted with slower activity and orders and a stronger employment reading. The indexes describe different parts of the survey rather than interchangeable measures of growth. Supplier Deliveries rose 3.5 percentage points to 56.7%. Unlike the other main indexes, a reading above 50% on this index indicates slower deliveries, not faster performance. Backlogs rose 1.4 points to 58%, while ISM said supply-chain commentary pointed to continued constraints. The Prices Index eased one point to 73%, but remained above 70% for the seventh time in eight months. Its 12-month average rose to 69.2%, the highest since April 2023, according to ISM. A lower monthly index reading does not mean that input prices fell; the survey still indicated price increases. ISM says the historical relationship between an October reading of 54.5% and the broader economy corresponds to a 2-percentage-point annualized increase in real GDP. That is a survey-based historical relationship, not a new BEA GDP estimate or a guarantee of future output. The release does not establish a Federal Reserve policy decision or prove that a soft landing has been achieved.

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