US ISM services PMI rises to 51.5 in August vs. 51.1 expected

• The ISM Services PMI was in expansion territory above 50 in August.
• The US dollar index becomes steady on the day above 101.00.

Economic activity in the US services sector expanded at a moderate pace in August, with the ISM Services PMI rising to 51.5 from 51.4 in July. This reading was above market expectations of 51.1.

Other details of the report showed that the Price Paid Index, the inflation component, rose to 57.3 from 57, while the Employment Index fell to 50.2 from 51.1.

Evaluating the survey’s findings, “low to moderate growth was cited across many industries, while high ongoing costs and interest rate pressures were often cited as having a negative impact on business performance and leading to ease in sales and traffic.” said Steve Miller, president of the study. Institute for Supply Management (ISM) Business Inquiry Committee Services.

“Although the inventory index rose 3.1 percentage points in expansion territory in August, many respondents indicated that their companies are still actively managing their inventories,” Miller added.

Market reaction

The US dollar index rebounded modestly on the immediate reaction to the PMI data and was last seen flat on the day at 101.24.