The ISM Services PMI in the US indicated a moderate expansion in August, reaching 51.5 compared to 51.4 in July, surpassing market expectations. The Prices Paid Index rose to 57.3, indicating inflationary pressures, while the Employment Index declined to 50.2.
According to Steve Miller, Chair of ISM Services Business Survey Committee, the survey results suggest low-to-moderate growth in many industries, with high costs and interest-rate pressures impacting business performance. Despite an increase in the Inventories Index, companies are still actively managing their inventories.
Market Response
Following the PMI data release, the US Dollar Index saw a modest recovery, settling flat at 101.24 for the day.
Analysis
The ISM Services PMI provides valuable insights into the health of the US service sector. A reading above 50 indicates expansion, which can have implications on businesses and investors. The rise in the Prices Paid Index suggests potential inflationary pressures, while the Employment Index decrease may signal challenges in job growth. Overall, the report highlights the ongoing economic trends and their impact on the US Dollar Index and financial markets.