Vikram Rai, Senior Economist | 416-923-1692
- Category:
- U.S.
- Data Commentary
- Commodities & Industry
U.S. ISM Services Index (August 2026)
中文标题
美国ISM服务业指数（2026年8月）
Citable research brief
Core conclusion · Tlines extraction
The U.S. ISM Services PMI rose to 55.4 in August 2026 from 54.1, extending expansion to 26 months, with demand indicators strong but employment contracting and prices surging, keeping the Fed cautious.
- Institution
- TD Economics / TD Securities
- Published
- 09/03/2026
- Research topic
- Monetary Policy · Federal Reserve Policy
- Time horizon
- near-term
Key arguments
- The ISM Services PMI rose to 55.4 in August from 54.1, with business activity and new orders both above 60.
- Employment index contracted for a second month at 47.8, indicating firms remain cautious on hiring.
- Prices index jumped to 72.6, the fifth reading above 70 in six months, signaling persistent inflation pressure.
- Strong demand and rising prices reduce the likelihood of Fed easing and keep a rate hike in play.
Key numbers
- ISM Services PMI
- 55.4
- Employment index
- 47.8
- Prices index
- 72.6
- Inventories index
- 56.7
Main risks
- Persistent price pressures could force the Fed to hike rates despite weak employment.
- Employment contraction may indicate underlying labor market weakness that could curb future growth.
Corresponding source evidence
With activity and orders accelerating and prices paid reaching 72.6, the report not only gives the Fed little reason to ease, but keeps the possibility of a rate hike in play despite weak hiring.
· near-term
Conditions / invalidation
- if price pressures remain persistent
Context: the conclusion is Tlines' automated extraction, not the institution's wording. Quoted evidence is publisher wording. Scope and date must travel with the conclusion.
Verify at the original source ↗Complete Research
ISM Services in August shows stronger activity, but intensifying price pressures
- The ISM Services PMI rose to 55.4 in August from 54.1 in July, extending the sector’s expansion streak to 26 months. The 1.3-point gain was stronger than expected and reflected a broad acceleration in demand, with both business activity and new orders moving above 60.
- Other demand signals were also strong. Backlogs climbed 4.7 points to 55.6, reinforcing the signal that demand strengthened materially in August. New export orders and imports posted sizable gains as well, each reaching 56.3.
- The labor market signal remained less encouraging. The employment index edged up 0.4 points to 47.8 but contracted for a second straight month. Services firms continue to manage headcount cautiously even as activity, orders, and backlogs strengthened.
- Price pressures intensified further, with the prices index rising 2.3 points to 72.6. That marks the fifth reading above 70 in six months and keeps the index above 60 for a 21st straight month. Its 12-month average rose to 68.5, the highest since April 2023.
- Inventories recorded the largest monthly increase, rising 5.3 points to 56.7. Backlogs, imports, and new export orders also posted gains of more than four points, indicating that demand strengthened and firms rebuilt stocks in August.
Key Implications
- The August ISM services report delivered a firmer read on the largest segment of the U.S. economy, but continued to sound a note of caution on employment. Activity and new orders both moved above 60, while stronger backlogs, trade flows, and inventories suggest demand carried solid momentum into late summer. Still, the contraction in employment shows that firms remain reluctant to translate stronger demand into additional hiring.
- Strengthening services demand is being accompanied by even more persistent price pressure. With activity and orders accelerating and prices paid reaching 72.6, the report not only gives the Fed little reason to ease, but keeps the possibility of a rate hike in play despite weak hiring.
Publisher disclaimer
This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.
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AI analysis
AI-generated from the report above · not a translation and not the institution's wording · verify against the official source
Cross-institution comparison · FED
How this page was produced
Tlines extracted the conclusion, arguments, numbers and risks above from the report published by TD Economics / TD Securities on 09/03/2026, then structured them for comparison. The publisher's own wording is reachable through the source link on this page. Last updated 10/17/2026. Methodology · Source policy · AI usage · Request a correction