Economic activity in the U.
S. services sector, the largest part of the economy, continued to grow in November as business activity and new orders increased, the Institute for Supply Management (ISM) reported today.
The Services Purchasing Managers' Index (PMI) rose to 52.6 in November, up from 52.4 in October, marking the fifth consecutive month above 50, marking the boundary between growth and contraction. However, the 12-month average of 51.7 was the lowest since August 2024.
The business activity/production index rose 0.2 points to 54.5 in November. The new orders index dropped to 52.9, down 3.3 percentage points from October, but above the 12-month average.
The number of outstanding orders approached growth, with the business activity index at 49.1, compared with 40.8 in October.
The price index fell to 65.4 in November, down from 70 in the previous month, indicating a slowdown in growth.
The continued growth in business activity and new orders indices, as well as the growing volume of outstanding orders, "are positive signs of the emerging recovery in the service sector," the ISM said in a statement. "On the other hand, respondents still note that tariffs and government shutdown affect both demand and costs."
The employment PMI rose to 48.9 from 48.2 in October, indicating a slowdown in contraction.
The supplier supply index increased by 3.3 points to 54.1, indicating a slowdown in supplier deliveries, "probably due to disruptions in air traffic due to the government shutdown and customs consequences related to tariff changes," the ISM said in a statement. Higher supply figures from suppliers indicate a slowdown in supply, which is usually a sign of growing demand and an improving economic situation.
