US Services Sector Growth Continues as Employment Index Rebounds

Steve Miller, chair of the ISM® Services Business Survey Committee, noted that the sector’s performance remains steady despite broader economic headwinds. The Employment Index climbed to 50.1 percent, a 2.3-percentage point increase from August, effectively reversing a brief period of contraction. This uptick suggests that firms are balancing business demand with necessary staff adjustments.

Inflationary pressures persist, with the Prices Index reaching 74 percent—its highest level since July 2022. Respondents highlighted that fuel costs, particularly diesel, along with the impact of tariffs, remain significant burdens on supply chains. While new export orders dipped below 50 percent for the first time in eight months, domestic business activity and new orders continue to provide a floor for growth. Thirteen industries reported expansion, led by wholesale trade and real estate, while sectors such as mining and construction faced contraction during the period.