ISM Services PMI for September 2026: What to Expect on October 5, and Why Prices Paid Matters More Than the Headline

The September 2026 ISM Services PMI comes out Monday, October 5, at 10:00 AM ET. Forecasters expect 55.1, a small step down from August's 55.4, according to the week-ahead calendar from investingLive. Any reading above 50 means the services side of the economy is still growing.

The headline is the least interesting number in this report. Two lines underneath it are the ones the market will read first: the Prices index, which hit 72.6 in August, its highest since August 2022, and the Employment index, which has been shrinking for two months. After a jobs report that showed 29,000 new jobs, those two lines are the closest thing to a second opinion on both halves of the Federal Reserve's problem. Education, not advice, and no forecast of our own.

What time is the ISM Services PMI released?

10:00 AM ET on Monday, October 5, 2026, from the Institute for Supply Management. The services report always lands on the third business day of the month, two days after the manufacturing report, per the ISM release calendar. That timing matters: 10:00 AM is thirty minutes into the regular session, so the number hits a market that is already open and still settling from the opening bell.

What is the ISM Services PMI?

It is a monthly survey of purchasing and supply managers at service businesses: retailers, hospitals, banks, restaurants, shippers, software firms, government agencies. Each one answers whether activity was higher, lower, or the same as the month before. The answers become indexes where 50 is the dividing line. Above 50, more firms are growing than shrinking. Below 50, the reverse.

The headline Services PMI is a simple average of four of those indexes, each counted equally:

• Business Activity: how busy firms were.
• New Orders: how much new business came in.
• Employment: whether firms added or cut staff.
• Supplier Deliveries: how slow deliveries were. Slower deliveries count as a higher reading, because they usually mean demand is strong.

Services are most of the US economy and most of its jobs, which is why this report carries more weight for the market than its manufacturing twin.

What the August report said

From the August 2026 ISM Services PMI report, released September 3:

• Services PMI: 55.4, up from 54.1 in July. The 26th straight month of expansion.
• Business Activity: 61.7, up from 59.1.
• New Orders: 60.9, up from 57.2.
• Employment: 47.8, up from 47.4, and still below 50. The index has been in contraction in 13 of the last 18 months.
• Supplier Deliveries: 51.3, down from 52.8.
• Prices: 72.6, up from 70.3. The highest reading since August 2022.
• Breadth: 12 industries reported growth, 5 reported contraction.

Put those together and August described an economy where demand was strong, costs were rising fast, and firms were not hiring. One respondent told ISM that the conflict in Iran and the strain on oil supplies had raised what the firm pays for fuel. Another said the firm had lost employees to normal attrition and was having trouble backfilling the positions with qualified candidates.

The part most previews skip: Prices is not in the headline

We checked the arithmetic of the August report. Add the four component indexes and divide by four:

• 61.7 + 60.9 + 47.8 + 51.3 = 221.7, and 221.7 divided by 4 is 55.4.

That matches the published headline exactly, and it shows something easy to miss. The Prices index is not one of the four. The number that worries the Fed most can rise sharply without moving the headline at all.

It also tells you what the 55.1 forecast implies. For the headline to come in at 55.1, the four components need to add up to 220.4, which is 1.3 points less than in August, in total, across all four. That is a very small change. A report can land right on the forecast and still carry a Prices reading or an Employment reading that changes the conversation. On Monday, read the table, not the headline.

Why this report matters more than usual

Three things landed in the past week that give it weight.

• The jobs report. The economy added 29,000 jobs in September and unemployment rose to 4.2%, per the Bureau of Labor Statistics. The ISM services Employment index had been below 50 for two months before that report. Monday's reading shows whether service firms kept cutting in September. We covered why stocks rose on that weak jobs number.
• The manufacturing report. The September ISM Manufacturing PMI, out October 1, came in at 54.5 against expectations of 54.9. Its Prices index jumped 6.8 points to 77.9. Factory employment was 52.7, which is growth. So factories are hiring while service firms are not, and both are paying much more for inputs.
• The Fed. The Fed raised its target range to 3.75% to 4.00% on September 17 and meets again on October 27 and 28. After the jobs report, futures tracked by the CME FedWatch tool put the odds of another hike near 17%. A services Prices reading that keeps climbing argues for a hike. An Employment reading that keeps shrinking argues against one. Our guide to whether the Fed raises rates again in October covers both sides.

Rising costs with falling employment is the combination behind the word showing up in headlines this weekend. We wrote a separate guide on what stagflation is and whether the US is in it.

How stocks tend to read the four possible reports

With the 10-year Treasury yield near 5.27%, the market has been trading the implication for interest rates rather than the number itself. That gives four broad readings. These are descriptions of how the logic runs, not predictions.

• Strong activity, prices cooling. The friendliest mix: growth without added pressure on the Fed.
• Strong activity, prices still rising. Good for earnings, bad for rate hopes. Yields usually decide which wins, and our guide to the 10-year yield above 5% explains why.
• Weak activity, prices cooling. Reads as a slowdown that takes a hike off the table. Stocks rallied on exactly that logic after the jobs report.
• Weak activity, prices still rising. The hardest mix, because the Fed cannot fix both at once. This is the one to watch for.

How to prepare for a 10:00 AM release

We build an automated trader, so this is the part we think about most. A 10:00 AM report is different from the 8:30 AM ones. Jobs and CPI land before the open, and the market has an hour to digest them. ISM lands thirty minutes after the open, inside the most volatile stretch of the day, as our guide to the best time of day to buy and sell stocks shows. None of the useful decisions require a view on the number:

• Decide before 9:30 whether you trade the first hour at all. Many rule sets simply wait until after 10:15 on days with a 10:00 report.
• Check your stops against a normal data-day swing. A stop that sits inside the usual ten-minute reaction will be hit by noise. See how to automate stop-losses.
• Size for the day you might get. Smaller positions on data mornings are a rule, not a guess. Our guide to position sizing covers the math.
• Know which holdings are rate-sensitive. Banks, homebuilders, utilities, and long-duration growth stocks move most when yields move. See which sectors do well when rates rise.

If you want rules like these to run without you watching the clock, set up your trading rules with JorgAI and connect the brokerage account you already have.

The rest of the week

• Wednesday, October 7, 2:00 PM ET: minutes of the Fed's September 15 and 16 meeting, the one that produced the hike. The dot plot from that meeting showed where policymakers expected rates to go.
• Thursday, October 8, 8:30 AM ET: weekly jobless claims. Forecast 200,000, previous 197,000.
• Friday, October 9, 10:00 AM ET: University of Michigan consumer sentiment, preliminary October reading. Forecast 48.1, unchanged. Its inflation-expectations line matters as much as the headline.
• Monday, October 12: stocks trade, bonds do not. See what is open on Columbus Day.
• Wednesday, October 14, 8:30 AM ET: September CPI. Our CPI preview has the forecasts.

The full month is in our October 2026 stock market calendar.

Common questions

What is a good ISM Services PMI number?

Anything above 50 means the sector is growing. Readings in the mid-50s, where the index has been, describe solid growth. The long-run pattern matters more than one month: August was the 26th month in a row above 50.

Is prices paid part of the Services PMI?

No. The headline averages Business Activity, New Orders, Employment, and Supplier Deliveries. Prices is reported alongside it but is not in the average, which is why the two can move in opposite directions.

What is the difference between ISM services and ISM manufacturing?

They are two separate surveys from the same organization. Manufacturing comes out on the first business day of the month and services on the third. Services covers a much larger share of the economy. In September, manufacturing printed 54.5.

Does the ISM report move the Fed?

Not on its own. It is one input, and the Fed weighs it with the jobs report, CPI, and PCE inflation. It matters most when its Prices and Employment lines confirm or contradict what those official reports say.

Sources: Institute for Supply Management, August 2026 Services PMI report and September 2026 Manufacturing PMI report; Bureau of Labor Statistics, Employment Situation, October 2, 2026; investingLive week-ahead calendar; CME FedWatch. This article is educational and is not investment advice.