U.S. Services Index Rises More Than Expected In May
(RTTNews) - The Institute for Supply Management released a report on Wednesday showing its reading on U.S. service sector activity increased by more than expected in the month of May.
The ISM said its services PMI rose to 54.5 in May from 53.6 in April, with a reading above 50 indicating growth. Economists had expected the index to tick up to 53.7.
The bigger than expected increase by the headline index partly reflected an acceleration in the pace of growth in new orders, as the new orders index jumped to 57.3 in May from 53.5 in April.
The business activity index also climbed to 57.7 in May from 55.9 in April, reaching its second highest reading since achieving the same reading in October 2024.
Meanwhile, the ISM said the employment index edged down to 47.9 in May from 48.0 in April, dipping to its second lowest reading since September 2025.
"Respondents commented frequently that their companies had instituted hiring freezes or were not backfilling vacated positions, however, most industries reported that they were holding flat in employment month over month," said Steve Miller, Chair of the ISM Services Business Survey Committee.
The report also said the prices index crept up to 71.3 in May from 70.7 in April, reaching its highest reading since hitting 72.6 in August 2022.
A separate report released by the ISM on Monday showed manufacturing activity in the U.S. expanded for the fifth consecutive month in May.
The ISM said its manufacturing PMI rose to 54.0 in May from 52.7 in April, with a reading above 50 indicating growth. Economists had expected the index to inch up to 53.1.
With the bigger than expected increase, the manufacturing PMI reached its highest level since hitting 55.9 in May 2022.
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