Economic activity in the services sector continued to expand in January, say the nation’s purchasing and supply executives in the latest ISM Services PMI Report. The Services PMI registered 53.8% to start 2026 as it finished 2025, on a positive note, with its 19th month in a row in expansion territory after ISM’s most recent seasonal adjustments.

All four subindexes were in expansion territory, said Steve Miller, chair of the Institute for Supply Management Services Business Survey Committee:

“January’s Services PMI is the result of a second month in a row of all four subindexes being in expansion territory. December 2024 and January 2025 featured similar subindex performance, but in the last two months, the PMI is stronger year over year by an average of 0.7 percentage point.

"The Employment Index expanded for a second straight month for the first time since January and February 2025. These are positive signs for continued expansion; however, the closely watched Prices Index continues to creep up, now 0.2 percentage point above its 12-month seasonally adjusted average of 66.4%."

There was more respondent commentary in January on tariff impacts and uncertainty, potentially the result of annual contract renewals and geopolitical tensions. Gasoline and diesel fuel continued to be cited as commodities down in price. With the highest Business Activity and Supplier Deliveries index readings since October 2024, indicating higher business activity levels and slower supplier deliveries, whether pricing increases will stick or expand needs to be closely watched.