U.S. ISM Services PMI Holds Steady in January; 19 Straight Months of Expansion
Summary
- ISM Services PMI 53.8 in Jan. & Dec., above expectations and the 12-month avg. of 51.8.
- Business Activity (57.4, 19th straight month of expansion), New Orders (53.1, eighth consecutive month of expansion), Employment (50.3, second successive month of expansion), and Supplier Deliveries (54.2 vs. 51.8).
- Prices Index (66.6) shows prices rising since June ’17, the fastest pace in three mths.
The U.S. ISM Services PMI held at 53.8 in January and December following ISM’s latest seasonal adjustments, slightly up from 52.4 in November, according to today’s report by the Institute for Supply Management, indicating expansion in the services sector for the 19th consecutive month. The January index was above 52.6 in January 2025 and a low of 49.4 in June 2024 but below a high of 55.5 in October 2024 and a record-high 67.5 in November 2021. The 12-month average was 51.8, pointing to continued growth in the U.S. services sector. The Action Economics Forecast Survey had expected 53.6 for January.
Haver Analytics constructs a composite index combining the services index and the manufacturing reading. This index rose to 53.7 in January from 53.1 in December and 51.9 in November, signaling expansion for the eighth straight month and at the fastest pace since October 2024. The latest figure was above a low of 49.3 in June 2024 and a low of 48.9 in December 2022 but below 52.3 in January 2025 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 advanced to 57.4 in January after increasing to 55.2 in December, indicating continued expansion in business activity for 19 straight months and at the fastest pace since October 2024. The index was up from a low of 50.0 in June 2024 but below a record-high 70.9 in November 2021. An increased 25.4% of respondents (NSA) reported higher activity in January while a reduced 17.7% reported an activity decline. The new orders index fell to 53.1 in January after rising to 56.5 in December, reflecting expansion in new orders for the eighth straight month. The index was above its recent 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. An increased 22.5% of respondents (NSA) reported higher new orders in January while 20.5% reported declines. Meanwhile, the supplier deliveries index (NSA) increased to 54.2 in January from 51.8 in December, indicating slower supplier delivery performance for the 14th straight month after one month in faster territory in November 2024.
On the labor front, the employment index fell to 50.3 in January after rising to 51.7 in December, showing employment activity in the services sector expanded for the second consecutive month, albeit at a slightly slower pace. 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 high of 58.9 in April 2021. In January, 13.8% of respondents (NSA) indicated higher employment while 16.2% reported declines.
On the inflation front, the prices index rose to 66.6 in January from 65.1 in December, 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 and a low of 55.1 in June 2023 but significantly below a record-high 83.7 in March 2022. An increased 33.4% of respondents (NSA) reported higher prices in January while only 2.0% reported price declines.
Additionally, the new export orders index dropped to 45.0 in January after rising to 54.2 in December, showing new export orders contracted for the sixth time in seven months and at the lowest level since March 2023. The imports index fell to 48.2 in January from 50.3 in December, registering the fourth contraction in five months and the lowest level since October. The inventories index decreased to 45.1 in January from 54.2 in December, indicating inventories contracted after expanding in December and November. The inventory sentiment index edged up to 54.3 in January from 54.1 in December, showing continued expansion since May 2023. The backlog of orders index increased to 44.0 in January after falling to 42.6 in December, marking the 11th straight 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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