U.S. ISM Services PMI Edges Up in July, Indicating Expansion for the 25th Straight Month
Summary
- ISM Services PMI slightly up to 54.1 in July, remaining above the 12-month avg. of 53.4.
- Business Activity (59.1) expands for the 25th consecutive mth.; New Orders (57.2) for the 14th straight mth.; Employment (47.4), at a four-month low, contracts in four of five mths.; Supplier Deliveries (52.8 vs. 54.4).
- Prices Index (70.3) elevated and above 70 for the fourth time in five mths., indicating prices rising since June ’17.
The U.S. ISM Services PMI inched up to a lower-than-expected 54.1 in July following a 0.5-point decline to 54.0 in June, according to data from the Institute for Supply Management, showing expansion in the services sector for the 25th straight month. The July index was above 50.5 in July 2025 and a low of 49.4 in June 2024, while remaining below its recent high of 56.1 in February and a record-high 67.5 in November 2021. The 12-month average was 53.4, pointing to continued growth in the U.S. services sector. The Action Economics Forecast Survey had expected 54.4 for July.
Haver Analytics constructs a composite index combining the services index and the manufacturing reading. This index rebounded to 54.3 in July after a 0.5-point decrease to 53.9 in June, signaling expansion for the 14th successive month. The latest reading was above 50.3 in July 2025 and a low of 49.3 in June 2024, albeit remaining below a high of 55.7 in February and a record-high 66.7 in November 2021. These series date back to July 1997.
In the latest services survey, the business activity index rose to 59.1 in July following a 2.3-point drop to 55.4 in June, indicating continued expansion in business activity for 25 months in a row and at the fastest pace since February. The index was above a low of 50.0 in June 2024 but below a peak of 70.9 in November 2021. In July, an increased 31.4% of respondents (NSA) reported higher activity while 10.1% reported an activity decline. The new orders index increased to 57.2 in July after a 2.2-point drop to 55.1 in June, reflecting expansion in new orders for the 14th consecutive month. The index was above a low of 47.2 in May 2025 but below a high of 61.0 in February 2023 and a record-high 69.2 in October 2021. In July, an increased 27.3% of respondents (NSA) reported higher new orders while 13.9% reported declines. Meanwhile, the supplier deliveries index (NSA) fell to 52.8 in July from 54.4 in June, indicating continued slowing in supplier deliveries for the 20th straight month, albeit at a less pronounced rate than in June, following one month in faster territory in November 2024.
On the labor front, the employment index dropped to 47.4 in July following a 3.3-point gain to 51.2 in June, showing employment activity in the services sector contracted for the fourth time in five months and at the fastest contraction rate since March. The latest reading was above a low of 43.5 in December 2023 but below a high of 54.1 in June 2023 and a peak of 58.9 in April 2021. In July, 14.3% of respondents (NSA) indicated higher employment while an increased 19.0% reported declines.
On the inflation front, the prices index, above 70 for the fourth time in five months, advanced to an elevated 70.3 in July from 67.7 in June, indicating prices paid by services organizations for materials and services had risen (i.e., above 50) since June 2017. The index was above a low of 53.9 in March 2024 but far below a peak of 83.7 in March 2022. In July, an increased 44.7% of respondents (NSA) reported higher prices while only 3.2% reported price declines.
Additionally, the new export orders index rose to 52.0 in July from 50.4 in June, showing new export orders expanded for the fifth time in six months and at the fastest rate since April. The imports index rebounded to 51.8 in July from 49.4 in June, marking the fifth expansion in six months. The inventories index edged up to 51.4 in July from 51.2 in June, indicating inventories expanded for the sixth successive month, while the inventory sentiment index dipped to 52.5 from 52.6, showing continued expansion since May 2023. The backlog of orders index slid to 50.9 in July from 54.9 in June, marking the slowest pace of expansion in six consecutive months following 11 straight months of contraction. These series are not seasonally adjusted and not included in the ISM Services PMI total.
The ISM Services PMI is a composite index consisting of four equally weighted diffusion indexes: Business Activity, New Orders, Employment, and Supplier Deliveries. A reading above 50 indicates expansion in the services sector; below 50 suggests contraction. Supplier Deliveries is the only ISM index that is inversed; a reading above 50 indicates slower deliveries. The ISM figures are available in Haver's USECON database, with additional detail in the SURVEYS database. The expectations figure from Action Economics is in the AS1REPNA database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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