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U.S. Services Activity Strengthens in October as Prices Climb and Hiring Stalls

With official data curtailed by the shutdown, private surveys now guide the outlook on growth and inflation.

A man looks at a stock quotation board displaying the Nikkei share average outside a brokerage in Tokyo, Japan, October 21, 2025. REUTERS/Manami Yamada/File Photo
People walk at a shopping area of Shinjuku in Tokyo, Japan, September 11, 2025.     REUTERS/Fabrizio Bensch
The moon rises over the Toronto city skyline as seen from Milton, Ontario, Canada, January 23, 2016.    REUTERS/Mark Blinch
Signage for a job fair is seen on 5th Avenue after the release of the jobs report in Manhattan, New York City, U.S., September 3, 2021. REUTERS/Andrew Kelly/File Photo

Overview

  • ISM nonmanufacturing PMI rose to 52.4 in October, with new orders up to 56.2 and prices paid at a three‑year high of 70.0, while services employment stayed in contraction at 48.2.
  • Regional Federal Reserve manufacturing surveys point to modest goods‑sector growth with sharply higher input costs and near‑flat employment.
  • ADP reported a stronger‑than‑expected 42,000 private payroll gain and said it will publish weekly employment updates during the shutdown.
  • The Congressional Budget Office estimates the prolonged shutdown could reduce fourth‑quarter GDP by 1.0 to 2.0 percentage points, deepening the reliance on PMIs and private data.
  • The Supreme Court heard arguments on presidential tariff authority, leaving existing duties in place for now as surveys cite tariffs for higher costs and weaker export demand; services PMIs abroad showed UK at 52.3, Canada at 50.5, and Japan at 53.1.