The US ISM Services Prices Index increased to 71.3 in May, up from 70.7 in April, indicating persistent cost pressures. The overall ISM Services PMI was 54.5, exceeding expectations. However, the employment index contracted to 47.9.
The Institute for Supply Management (ISM) reported that the US ISM Services Prices Index rose to 71.3 in May, an increase from April's reading of 70.7. This figure, however, was below the forecast of 72.3. The overall ISM Services PMI came in at 54.5, exceeding the expected 53.8 and the prior month's 53.6, indicating continued expansion in the services sector. Business activity improved to 57.7 from 55.9, while new orders saw a significant jump to 57.3 from 53.5. However, the employment index contracted further, falling to 47.9 from 48.0. Respondents cited higher costs for oil, fuel, freight, labor, and commodities, with no commodities reported as decreasing in price. Supplier deliveries slowed, with the index at 55.2, and backlogs of orders remained in expansion.
The persistent rise in the ISM Services Prices Index, despite being below forecast, suggests ongoing inflationary pressures within the services sector, which could influence the Federal Reserve's monetary policy decisions.