Summary of June ISM Services, July 6, 2026

  • The services PMI came in at 54.0 — just under the 54.2 consensus and May’s 54.5, but a 13th straight month of expansion, with 14 industries growing (ISM, June Services Report On Business).
  • The prices index fell 3.6 points to 67.7, its first reading below 70 since February. Services are the slow-moving side of core inflation — this is the cost gauge that matters, and it eased.
  • Services employment expanded for the first time in four months, at 51.2 — one month, cutting against the weak June payroll count, with part of it credited to World Cup hiring.
  • The bad combination would have been slowing activity with firm prices. June delivered steady activity and cooling costs. That subtracts another piece from the case for a rate hike without adding one for a cut.

Both ISM cost gauges are now cooling

Last week the manufacturing prices index fell nine points to 73. Now the services prices index — covering the far larger share of the economy — has followed, down 3.6 to 67.7, below 70 for the first time since February (ISM). The timing matches June’s oil reversal — and the drop showed up even in services, where costs are mostly labor and energy pass-through was least assured. The release itself doesn’t isolate the cause; respondents still cite tariffs.

ISM prices indexes since 2024: both peaked with the spring oil spike — manufacturing at 84.6 in April, services at 71.3 in May — and both fell in JuneISM prices indexes since 2024: both peaked with the spring oil spike — manufacturing at 84.6 in April, services at 71.3 in May — and both fell in June

A 67.7 still means a large majority of firms report rising costs — the rate of increase eased; prices did not fall. Whether this cooling reaches consumer prices is exactly what the July 14 CPI will show; core services inside that print is the number that decides the hike-versus-hold argument.

Services hiring turned positive while payrolls stalled

The employment index rose 3.3 points to 51.2 — services firms adding staff on balance for the first time since February. That cuts against the June payroll report’s +57,000, but the two measure different things: the ISM index counts how many firms are hiring, not how many people; the BLS counts net jobs, and its June weakness was concentrated in leisure and hospitality’s soft seasonal hiring. Respondents credited some of June’s services hiring to the World Cup — a one-time event, not a trend. One month of divergence decides nothing; if the ISM employment reading holds above 50 through the August 7 payroll report, the labor story is better than the +57,000 suggested.

Activity, meanwhile, slowed without stalling: business activity at 55.4 (from 57.7), new orders 55.1, and order backlogs rising to 54.9 — firms are still working through more demand than they can clear.

ISM services internals, June 2026: prices fell to 67.7 while employment crossed above 50 — the sub-indexes vs the 50 breakeven with May's level markedISM services internals, June 2026: prices fell to 67.7 while employment crossed above 50 — the sub-indexes vs the 50 breakeven with May's level marked

Sources: ISM, June 2026 Services PMI Report On Business — PMI 54.0; all sub-indexes (current, prior, and the chart) archived in the GeoMean data files. Consensus (54.2) is the market’s expectation going in. Builds on the June ISM manufacturing note, the Jul 3 weekly (June payrolls +57K), and the May PCE read (core PCE 3.4%). ISM is a diffusion index (50 = breakeven); it is proprietary and not on FRED, so figures are from the ISM release.