U.S. Services Index Inches Slightly Higher In July

(RTTNews) - A report released by the Institute for Supply Management on Wednesday showed a slight uptick by its reading on U.S. service sector activity in the month of July.

The ISM said its services PMI crept up to 54.1 in July from 54.0 in June, with a reading above 50 indicating growth in the sector. Economists had expected the index to rise to 54.5.

"Tariff impacts and the Middle East conflict continued to be mentioned by respondents, but much less frequently than in prior reports," said Steve Miller, Chair of the ISM Services Business Survey Committee "The World Cup was again cited in the comments regarding increased business activity and new orders."

"Overall, the U.S. services economy continues to be resilient," he added, but noted, "Concerns still exist regarding mortgage and inflation rates, and we are still in the midst of pricing impacts due to the recent run-up in petroleum costs."

The slight uptick by the headline index came as the business activity index climbed to 59.1 in July from 55.4 in June, while the new orders index rose to 57.2 in July from 55.1 in June.

Meanwhile, the report said the employment index fell to 47.4 in July from 51.2 in June, returning to contraction territory after only one month in expansion.

The ISM also said the prices index increased to 70.3 in July from 67.7 in June, coming in above 60 for the fourth time in five months.

On Monday, the ISM released a separate report showing its reading on U.S. manufacturing activity increased by more than expected in the month of July.

The ISM said its manufacturing PMI climbed to 55.6 in July from 53.3 in June, with a reading above 50 indicating growth in the sector. Economists had expected the index to rise to 54.0.

With the much bigger-than-expected increase, the index reached its highest level since hitting 55.9 in May 2022.