U.S. Services Sector Accelerates in February 2026, PMI Hits 56.1%
Event summary
- The ISM Services PMI® rose to 56.1% in February 2026, its highest level since July 2022, indicating robust expansion in the services sector.
- Business Activity and New Orders indexes reached their highest levels since 2024, at 59.9% and 58.6% respectively.
- Employment Index expanded for the third consecutive month, registering 51.8%, signaling continued hiring in the sector.
- Backlog of Orders Index returned to expansion territory for the first time in 12 months, rising to 55.9%.
- Fourteen industries reported growth in February, up from eleven in January, with only three industries in contraction.
The big picture
The February 2026 ISM Services PMI® report highlights a significant acceleration in the U.S. services sector, with key indexes reaching multi-year highs. This expansion is driven by strong business activity, new orders, and employment growth, suggesting a robust economic environment. The data indicates that the services sector is heating up, with implications for broader economic growth and potential challenges related to supply chain dynamics and trade uncertainty.
What we're watching
- Economic Expansion
- Whether the sustained expansion in the services sector will translate into broader economic growth, particularly given the 2.5-percentage point increase in real GDP implied by the February PMI reading.
- Supply Chain Dynamics
- How the ongoing slower supplier deliveries, now in its 15th consecutive month, will impact operational efficiency and cost management across industries.
- Tariff and Trade Uncertainty
- The potential impact of tariff volatility and shifting bilateral trade agreements on procurement strategies and cost competitiveness, particularly in sectors like mining and retail trade.