Economic activity in the US services sector, the biggest part of the economy, expanded further in November, as business activity and new orders rose, the Institute for Supply Management (ISM) reported today.
The purchasing managers index (PMI) for services rose to 52.6 in November, up from 52.4 in October, marking the fifth consecutive month above 50, which is the divide between expansion and contraction. Still, the 12-month average of 51.7 was the lowest since August 2024.
The business activity/production index rose in November by 0.2 points to 54.5. The new orders index slipped to 52.9, down by 3.3 percentage points from October but above its 12-month average.
The backlog of orders approached expansion with a PMI at 49.1, up from 40.8 in October.
The prices index fell to 65.4 in November, down from 70 the prior month, signaling slowing gains.
The continued expansion in the business activity and new orders indexes and the rising backlog of orders "are positive signs of an emerging recovery for the services sector", ISM said. "On the downside, tariffs and the government shutdown continue to be noted by survey respondents as impacting both demand and costs."
The employment PMI rose to 48.9 from 48.2 in October, signaling a slowing contraction.
The supplier deliveries index rose by 3.3 points to 54.1, indicating slower deliveries by suppliers, "likely due to air traffic disruptions from the government shutdown and customs impacts related to changing tariffs," ISM said. A higher supplier delivery reading indicates slower deliveries, typically a sign of rising demand and an improving economy.
