US ISM Services PMI edges higher to 51.5 in August vs. 51.1 expected

• ISM Services PMI stood in expansion territory above 50 in August.
• US Dollar Index turns flat on the day above 101.00.

The economic activity in the US service sector expanded at a moderate pace in August, with the ISM Services PMI edging higher to 51.5 from 51.4 in July. This reading came in above the market expectation of 51.1.

Other details of the report showed that the Prices Paid Index, the inflation component, rose to 57.3 from 57, while the Employment Index declined to 50.2 from 51.1.

Assessing the survey's findings, "low-to-moderate growth was cited across many industries, while ongoing high costs and interest-rate pressures were often mentioned as negatively impacting business performance and driving softness in sales and traffic," said Steve Miller, Chair of the Institute for Supply Management (ISM) Services Business Survey Committee.

"Although the Inventories Index increased by 3.1 percentage points into expansion territory in August, many respondents indicated their companies are still actively managing down their inventories," Miller added.

Market reaction

The US Dollar Index recovered modestly with the immediate reaction to the PMI data and was last seen flat on the day at 101.24.