FX.co ★ US Services Activity Shrinks for 1st Time in About a Year: ISM

The ISM Services PMI slipped to 49.9 in May 2025, down from both 51.6 in April and market predictions of 52. This figure indicates a slight downturn in the US services sector, marking its first decline in activity since June of the previous year amid increasing uncertainty. Production came to a halt (50 compared to 53.7 previously), while new orders (46.4 down from 52.3) and inventories (49.7 down from 53.4) contracted, and the backlog of orders dwindled more rapidly (43.4 compared to 48). Furthermore, price pressures surged to their highest since November 2022, reaching 68.7 compared to 65.1 earlier, likely influenced by tariff impacts. In parallel, supplier deliveries decelerated (52.5 compared to 51.3), and employment saw a rebound (50.7 up from 49). Steve Miller, Chair of the Institute for Supply Management Services Business Survey Committee, noted, "Respondents continued to report challenges in forecasting and planning due to prolonged tariff uncertainty, often citing efforts to delay or minimize orders until the effects become more evident."