The US Institute for Supply Management (ISM) service sector employment index rose to 51.2 in June, climbing 3.3 points from the previous month and surpassing the baseline of 50 for the first time since February. The prices index declined to 67.7 from 71.3 in May, marking the first decrease in four months. ISM's Steve Miller, chair of the Services Business Survey Committee, attributed the employment gains to companies' confidence in justifying selective but gradual hiring increases, with World Cup-related employment growth likely contributing to the index rise.
ISM Service Sector Employment Index Reaches 51.2 in June
The ISM service sector Purchasing Managers' Index (PMI) data for June showed the employment sub-index at 51.2, up 3.3 points from the previous month. This marked the first time the index exceeded the 50 baseline since February (51.8), before the impact of the Iran war was reflected in the data.
The prices index, which indicates inflationary pressure, fell from 71.3 in May to 67.7. While the absolute level remains elevated, this represented the first decline in four months.
![ISM Service Sector Data]()
Data source: Institute for Supply Management (ISM)
Manufacturing Sector Shows Parallel Employment and Price Trends
The ISM manufacturing PMI for the same month, released last week, showed similar movements. The prices index plunged 9.1 points month-over-month to 73.0, while the employment index rose from 48.6 to 49.7.
The manufacturing employment index increased for two consecutive months, reaching its highest level since January of last year. The last time the manufacturing employment index exceeded the baseline was September 2023 (51.7).
![ISM Manufacturing Sector Data]()
Data source: Institute for Supply Management (ISM)
ISM Official Attributes Employment Gains to World Cup Impact
Steve Miller, chair of the ISM Services Business Survey Committee, stated on the 6th that "June survey respondents mentioned the price impact of petroleum products less frequently, while tariff impacts continued to be highlighted as a topic adding upward price pressure."
Regarding employment, Miller said "businesses are providing confidence that they can justify selective but gradual employment increases," adding that "US World Cup-related employment growth likely contributed significantly to the employment index rise."
FAQ
What does the ISM service sector employment index rising above 50 indicate?
The ISM service sector employment index reaching 51.2 in June, surpassing the 50 baseline for the first time since February, indicates expansion in service sector hiring. An index above 50 signals growth, while below 50 indicates contraction.
Why did the ISM service sector prices index decline in June?
The ISM service sector prices index fell from 71.3 in May to 67.7 in June, marking the first decline in four months. Survey respondents mentioned petroleum product price impacts less frequently, though tariff-related pressures continued to contribute to price increases.
