Markets forecast a modest uptick in U.S. services sector growth, signaling continued expansion but at a slower pace.
The Institute for Supply Management’s May Services PMI is set for release Wednesday, with economists projecting a reading of 53.8, up from April’s 53.6. The index, a key gauge of U.S. services sector health, has remained above the 50 threshold—indicating expansion—for 22 consecutive months, though growth has softened since March’s 54.0 print.
April’s report showed employment in contraction for the second straight month, with the Employment Index at 48.0, while the Prices Paid Index held steady at 70.7, its highest 12-month average since May 2023. Analysts note persistent inflationary pressures, driven by elevated petroleum-related costs, regardless of geopolitical developments.
The data will offer insight into whether the services sector’s expansion is stabilizing or losing further momentum amid mixed labor and pricing signals.