ISM Services PMI

The ISM Services PMI (formerly Non-Manufacturing) is a monthly US services health score from ISM in Tempe, Arizona, running since 1997. It surveys purchasing and supply executives nationwide about change against the prior month. Panel spans 18 NAICS groups (the US industry grouping system), including goods producers like Mining and Construction. It is not manufacturing and does not measure output levels; each index is a diffusion index (a breadth gauge of direction, not depth).

Each covers 1 month and appears after 10:00 a.m. ET on the 3rd business day, or the 4th in January unless the NYSE is closed. Each release shows a 10-index glance table, a Manufacturing comparison, industry growth lists, respondent quotes, price and shortage commodity lists, response splits and 12-month history. Raw responses are never revised, while seasonal factors are reset each year using X-13-ARIMA, with the next year projected ahead. Diffusion gauges act as leading indicators (early signals); above 50% means expansion, above 49% over time means the economy is growing, mapped to GDP growth.

The headline (the composite average) blends 4 equally weighted parts, so each can move it.

• Business Activity, 25%: seasonally adjusted activity change against the prior month.
• New Orders, 25%: seasonally adjusted incoming demand against the prior month.
• Employment, 25%: seasonally adjusted hiring change against the prior month.
• Supplier Deliveries, 25%: delivery speed change, not seasonally adjusted, read inversed (above 50% means slower, a demand strength sign).

The September 2024 release (published October 3, 2024) put the PMI at 54.9%, up 3.4 points from 51.5. Business Activity at 59.9% and New Orders at 59.4% drove the jump while Employment fell to 48.1%, so strength in orders can hide labor weakness. Supplier Deliveries rose to 52.1%, meaning slower delivery under stronger demand, while Prices held at 59.4%, watched as an inflation gauge. April 2024 printed 49.4% and June 2024 printed 48.8% before the rebound, showing a sub-50 month is noise until repeated.

1. Diffusion index: for each part add % reporting higher to 0.5 x % reporting same, to 1 decimal place. For Supplier Deliveries use % reporting slower.
2. Seasonal adjustment: divide Business Activity, New Orders and Employment by their monthly seasonal factor (a calendar correction), rounding to 1 decimal place. For illustration, 30.1% higher plus 0.5 x 61.7% same gives 61.0, divided by 1.018 gives 59.9.
3. Headline average: add the 4 results and divide by 4; small rounding gaps may remain. For illustration, (59.9 + 59.4 + 48.1 + 52.1) / 4 equals 54.9.
4. Other gauges: Prices (input costs) and 5 companions use diffusion only, rounded to 1 decimal, with no seasonal division.