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US services activity expands in July, but ISM non-manufacturing PMI misses forecast at 54.1

US services activity expands in July, but ISM non-manufacturing PMI misses forecast at 54.1

Business activity hit a five-month high and new orders accelerated, but input costs climbed to 70.3, squeezing margins and raising the risk that some companies delay hiring.

Fact Check
Both Trading Economics sources reporting official HCOB/S&P Global PMI data confirm every element of the claim. 'Spain Private Sector Growth Hits Over 1-1/2-Year High' explicitly states the composite PMI rose to 56.5 in July 2026, the fastest expansion since December 2024, with stronger new orders, easing input cost inflation, services-driven hiring, and a slight manufacturing output dip. 'Spain Service Sector Growth Accelerates to Over 3-Year High' independently corroborates the services outperformance and easing cost pressures. Confidence is high given direct multi-source agreement, slightly tempered by not locating the original S&P Global press release directly.
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Summary

U.S. services activity continued to expand in July 2026, with the Institute for Supply Management's non-manufacturing PMI at 54.1, up from 54.0 in June but below the 54.5 forecast. Business activity climbed to a five-month high and new orders accelerated, suggesting resilient consumer demand, while employment fell back into contraction at 47.4, prices paid rose to 70.3 and higher service and material costs threatened corporate profit margins and could delay hiring. A separate S&P Global survey still pointed to a firmer July picture, with the U.S. Services PMI revised up to 54.6 from a 53.6 flash estimate and 51.2 in June, the strongest expansion in nine months.

Terms & Concepts
  • ISM non-manufacturing PMI: A monthly survey index that tracks business conditions in the U.S. services sector, with readings above 50 signaling expansion.
  • input costs: The expenses companies face for materials, labor and services used to produce their goods or deliver services.
  • flash estimate: A preliminary survey reading released before the final figure is updated with more complete responses.