U.S. Services Sector Growth Slows in September 2026 Amid Rising Cost…

Event summary

The ISM Services PMI® registered 54.9% in September 2026, down 0.5 percentage points from August, marking the 27th consecutive month of expansion.
Business Activity Index decreased 5.2 points to 56.5%, while New Orders Index fell 1.1 points to 59.8%.
Employment Index returned to expansion territory at 50.1%, up 2.3 points from August.
Prices Index hit 74%, the highest since July 2022, with fuel costs cited as a major concern.
Thirteen industries reported growth, while four contracted, with Construction and Agriculture among the hardest hit.

The big picture

The U.S. services sector continues to expand but at a slower pace, with rising fuel and commodity costs creating headwinds. The sector's resilience is being tested by supply chain disruptions and labor market pressures, particularly in construction and agriculture. The ISM Services PMI® suggests the economy is still growing, but the margin for error is narrowing as cost pressures mount.

What we're watching

Cost Inflation: Whether the sustained high Prices Index (74%) will force service providers to raise prices or cut margins.
Supply Chain Dynamics: How longer supplier delivery times (53.2%) will impact service sector productivity.
Employment Trends: The pace at which employment growth (50.1%) can be maintained amid rising backlogs and operational pressures.