Preview: Due September 3 - U.S. August ISM Services - Slightly firmer within a tight range
We expect an August ISM services index of 54.5, up from 54.1 in July but keeping the index in a tight range, which held between 53.6 and 54.5 between March and July.
The S and P services PMI saw a strong bounce in August to 56.8, reaching its highest since a matching December 2024, but the index is not well correlated with ISM services. Regional Fed services surveys from the Philly and Richmond Feds, as well as the Empire State, all slowed somewhat in August.
We expect ISM services data to show slowing in new orders, to 57.0 from 57.2, and more significantly business activity, to 58.0 from 59.1, both correcting July improvements. However we expect a correction higher in employment, to 49.0 from July’s weaker 47.2, and a bounce in delivery times to 54.0 from July’s weaker 52.8 on renewed supply disruptions.
Prices paid do not contribute to the composite. While this index has also kept to a tight range, risk is on the upside on increased Middle East risk. We expect a rise to 72.0 from 70.3, which would move above the recent high of 71.3 seen in May, and reach the highest level since August 2022.