US services sector holds up in August, ISM says
By Alexander Bueso
Date: Thursday 04 Sep 2025
(Sharecast News) - Service sector activity in the US held up better than expected last month, the results of a closely followed survey showed.
Nonetheless, many respondents indicated that tariffs were increasingly on their minds and that their impact was only now starting to be felt.
The Institute for Supply Management's Purchasing Managers' Index rose from a reading of 50.1 for July to 52.0 in August.
Economists had pencilled in a reading of 51.0 for last month.
Subindices for production and new orders improved from 52.6 to 55.0 and from 50.3 to 56.0.
Another sub-index for employment was little changed, ticking higher from 46.4 to 46.5, while that for prices dipped from 69.9 to 69.2.
The sub-index for imports jumped from 45.9 to 54.6.
One purchasing manager from the Accommodation and Food sector said that they expected to see the full effect of tariffs on their cost of goods sold by October.
An importer from Europe in the Agriculture and Forestry space meanwhile said they did not intend to pass on the cost from tariffs, but that it was becoming harder to avoid it.
"The solid rise in the ISM services index in August matches the generally positive mood around the economy's growth prospects in the third quarter," said Bradley Saunders, North America economist at Capital Economics.
"The tick down in the prices paid index is a relief, but still leaves the index at a level consistent with a renewed acceleration in 'supercore' inflation as tariff effects continue to bleed into other areas of the economy."
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