The ISM Services PMI fell to 54.5 in October 2026, its lowest level in three months, down from 54.9 in September and below market expectations of 54.8. The data signaled a moderation in services-sector growth, driven by slower business activity (53.8 vs 56.5), weaker new orders (55.9 vs 59.8), and softer inventories growth (55.4 vs 57.8).
At the same time, supplier delivery performance slowed (56.7 vs 53.2), employment expanded for a second consecutive month (51.4 vs 50.1), and price pressures eased slightly (73 vs 74).
“Tariffs and fuel cost impacts continued to be the most-cited issues affecting respondents’ supply chains, while many respondents indicated they are not yet seeing the full impact of these cost escalations or have not passed them through to customers. This indicates that more pricing pressure is on the way if oil and tariff cost impacts are not mitigated, even if they do not increase from current levels. Commentary on supply chain constraints increased significantly month over month,” said Steve Miller, Chair of the ISM.
