Strong Demand Lifts US Services Activity in August

WASHINGTON, Sept 4, 2026, U.S. services sector activity strengthened in August as robust demand pushed new orders to a 3½‑year high, raising concerns that inflationary pressures could persist. The Institute for Supply Management (ISM) reported its non‑manufacturing PMI rose to 55.4 from 54.1 in July, supported by stronger business activity (61.7) and new orders (60.9). However, employment remained weak at 47.8, while the prices index climbed to 72.6, signaling persistent cost pressures.

US Services

The improvement was broadly consistent with the S&P Global Services PMI, which jumped to 56.8 from 54.6, underscoring stronger expansion in the services sector. Meanwhile, initial jobless claims edged up slightly to 206,000 for the week ended Aug. 29, with continuing claims rising to 1.779 million, suggesting layoffs remain limited though hiring conditions may be moderating.

Analysts said the data point to resilient U.S. economic conditions, with strong services demand offsetting softer employment trends. For the Federal Reserve’s Sept. 15–16 meeting, the readings are unlikely to trigger immediate policy changes, but upcoming inflation and labor reports will be critical in shaping rate decisions.

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