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ISM Services PMI Stagnates Amid Inflation and Uncertainty

10/4/2025

38 7 Full Breakdown

Summary

ISM Services Decline

Institute for Supply Management (ISM) Services PMI fell to 50 in September, signaling stagnation after August’s 52.
The Employment Index rose to 47.2 but remains in contraction for the fourth month.
Prices Paid Index rose to 69.4, signaling inflation pressures that complicate Fed rate cuts.
The government shutdown delayed data, including the jobs report, while tariffs add costs and uncertainty.

Summary

Job Market Downturn

Hiring plans for the year total 204,939 positions, down 58% from last year—the lowest forecast since 2009.
ADP reports private-sector payroll losses of 32,000 in September, signaling a downturn.
Job openings fall 17.2% year over year, with declines in professional services and government.
Planned job cuts reach 946,426 for the year through September, the highest nine months since 2020.

History

Historical Context

The 2008 financial crisis triggered a severe economic downturn, with U.S. unemployment peaking at 10% in 2009. Recovery has been sluggish, as evidenced by a 17.2% drop in job openings year-over-year in September 2023. This ongoing uncertainty reflects challenges in labor markets and inflation management strategies, echoing the stagnation seen in Europe during the 1970s and 1980s.

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ISM Services Decline

Institute for Supply Management (ISM) Services PMI fell to 50 in September, signaling stagnation after August’s 52.
The Employment Index rose to 47.2 but remains in contraction for the fourth month.
Prices Paid Index rose to 69.4, signaling inflation pressures that complicate Fed rate cuts.
The government shutdown delayed data, including the jobs report, while tariffs add costs and uncertainty.

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