ISM Services PMI Rises To 51.5: Stronger Services Sector Insights

ISM Services PMI Outperforming Estimates

On September 5, 2024, the Institute for Supply Management released the ISM Services PMI report for August, revealing that ISM Services PMI increased from 51.4 in July to 51.5 in August, significantly beating the analyst consensus estimate of 51.1. Furthermore, the Business Activity Index declined from 54.5 in July to 53.3 in August, while the New Orders Index improved from 52.4 to 53.0.

Sector Performance and U.S. Dollar Reaction

The Institute for Supply Management remarked, “The increase in the Services PMI in August is due to all directly factoring indexes (Business Activity, New Orders, Employment, and Supplier Deliveries) with readings close to or above 50 percent.” Today’s reports also noted that the final reading of the S&P Global Services PMI for August rose from 55.0 to 55.7, outperforming the analyst forecast of 55.2. The S&P Global Composite PMI improved from 54.3 to 54.6, contrary to expectations of a drop to 54.1. Importantly, readings above 50 suggest sector expansion.

Market Reactions and Economic Indicators

The U.S. Dollar Index climbed towards the 101.25 level as traders reacted positively to the favorable ISM Services PMI report, indicating that the services sector remains in good shape. Conversely, gold prices pulled back towards the $2510 level as attention shifted towards the rebound of the U.S. dollar. The SP500 index moved away from session highs, attempting to settle below the 5525 level.