ISM Services Employment

The ISM Services Employment Index is a monthly sub-index of the Services PMI (Purchasing Managers' Index, a monthly services gauge). Published by the Institute for Supply Management of Tempe, Arizona, it has run since June 1997. It surveys purchasing and supply executives across 18 service industries, weighted by GDP (total output), for United States operations only.

It is a diffusion index (a breadth gauge) of month to month direction, not job counts, government payrolls, manufacturing jobs, or levels. For the headline index, above 50% means services are expanding, while above 48.6% points to wider economic expansion over time.

Responses are collected through most of each month, with most arriving late, and cover United States operations for that month versus the prior month. ISM compiles the report for release at 10:00 AM ET (Eastern Time) on the 3rd business day of the next month.

Each release prints the headline Services PMI with Business Activity, New Orders, Employment, Supplier Deliveries, Prices, Inventories, Inventory Sentiment, Backlog, New Export Orders, and Imports. It also carries comments, industry lists, commodity notes, history tables, and a manufacturing comparison. Raw answers are never changed, readings are not revised monthly, seasonal factors (adjustments for calendar patterns) update each January, and 50% divides expansion from contraction.

The index has no sub-parts; it moves only with the share of firms reporting higher, same, or lower employment. Its moves are read beside Business Activity, New Orders, Supplier Deliveries, Prices, Inventories, Backlog, New Export Orders, and Imports.

• Higher: firms reporting more employment than the prior month.
• Same: firms reporting no change in employment.
• Lower: firms reporting less employment than the prior month.

In the June 4, 2025 release for May 2025, the Services PMI was 49.9%, down 1.7 points from April. That was its fourth contraction in 60 months since June 2020. Employment returned to expansion at 50.7%, up 1.7 points from 49.0% in April 2025, on a 14.3% higher, 72.5% same, and 13.2% lower split.

New Orders fell to 46.4%, contracting for the first time since June 2024, while Business Activity sat at 50.0%, out of expansion since May 2020. Tariff uncertainty froze orders while firms kept filling roles, showing 50.7% means breadth, not jobs: slightly more firms hired than cut.

1. Tally: Sort Employment answers into % higher, % same, and % lower versus the prior month.
2. Unadjusted index: Add % higher plus half of % same, kept to 2 decimals. For example, 14.3% higher and 72.5% same gives 50.55. April 2025 gives the check: 14.6% higher and 69.0% same gives 49.10.
3. Seasonal adjustment: Divide by that month's ISM seasonal factor, then round to 1 decimal. That step turns 50.55 into the published 50.7%.
4. Headline blend: Enter the adjusted Employment index into the Services PMI as 1 of 4 equal parts. Services PMI equals Business Activity plus New Orders plus Employment plus Supplier Deliveries (inversed so above 50% means slower delivery), divided by 4.