ISM's services prices index climbs to 74.0, its highest since July 2022
ISM's services prices index rose to 74.0 in September, its highest reading since July 2022, even as the sector's growth cooled. Cost increases that widespread, after September's quarter-point Fed hike, make an early cut harder to justify.
The Investor · Invest desk
What happened
- Fed Vice Chair Philip Jefferson said on October 1, before the survey came out, that inflation risks were tilted to the upside.
- The headline services PMI slipped to 54.9, still above the 50 expansion line for a 27th consecutive month.
- New export orders dropped to 46.9, below 50 for the first time in eight months.
- Bitcoin traded near $85,580 on CryptoSlate's October 6 page, down 0.04% over 24 hours.
Why it matters
- Who has to decide decision Under the data-dependent test Jefferson set out, a cut soon would need later surveys to show input-cost increases narrowing.
- What it limits constraint Because the index counts how many firms paid more and not how much more, it cannot by itself tell policymakers how large the price increases are.
- What it costs cost Keeping rates high lands first on rate-sensitive buyers; in construction, one of four contracting industries, a respondent said roughly half of would-be purchasers already miss qualification thresholds.
- Who's exposed exposure Holders of margined bitcoin futures face forced collateral calls if a hawkish repricing moves prices against them, though no reaction to this survey has been shown.
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ISM's prices gauge is a diffusion index. It records how widely input costs rose across respondents. According to CryptoSlate, it does not estimate how large the increases were and cannot be read as a consumer-inflation rate [6]. On breadth, September sits 0.5 points below the 74.5 recorded in July 2022 [25]. Steve Miller, who chairs ISM's Services Business Survey Committee, said tariffs and fuel were the most cited pressures [11]. "Fuel costs were mentioned twice as often as any other single issue impacting performance," Miller said [12]. Fuel has been on the survey's list of commodities rising in price for eight straight months, alongside diesel, copper, steel and memory products [13].
Most of the cooling is in one component. Business activity fell 5.2 points, from 61.7 to 56.5, while the headline index moved 0.5 [26]. Orders and backlogs held up. New orders slipped only 1.1 points to 59.8 [14], and the backlog index rose a point to 56.6, also its highest since July 2022 [15]. Supplier deliveries slowed for a 22nd month, and Miller said tariff-related delays were extending lead times [16].
Firms are adding staff to work through those backlogs. Employment rose 2.3 points to 50.1, an uptick Miller attributed in part to growing backlogs and elevated activity [31]. CryptoSlate counts two months of contraction before it, Quartz three [30][31].
September's quarter-point increase moved the federal funds target range to 3.75%-4.00% from 3.50%-3.75% [8][28]. Jefferson said future adjustments should depend on the data, the outlook and the balance of risks [9]. I think the breadth of cost increases outweighs the activity drop for the next decision, because orders, backlogs and hiring all held or rose in the same month [14][15][31]. The counter-case has numbers behind it: activity fell 5.2 points while prices rose 1.4 [26][27], and a diffusion index can fall as quickly as it rose. If fuel and tariff costs fade, the slowdown carries more weight with the Fed. If they persist while backlogs keep firms hiring, the higher range stays in place longer. The view is wrong if October's prices index drops back below August's 72.6 while activity keeps sliding [1].
The step from there to leveraged bitcoin has less support. Coinbase's documentation describes perpetual funding as payments between longs and shorts that keep perpetual prices near spot [20], and CryptoSlate says that funding cannot be inferred from the fed funds target [21]. A February 2023 New York Fed study using intraday data found bitcoin largely disconnected from monetary and macroeconomic news in its sample [22]. The coin's 24-hour change on October 6 came to about $34 [29], a rolling figure CryptoSlate says cannot identify a reaction to the survey [24]. By CryptoSlate's own test, the funding-risk case strengthens if adverse policy or yield repricing coincides with weaker leveraged demand, and weakens with easing cost pressure, stable rate expectations or stronger buying without leverage [32].
What to watch
- Whether fuel stays on ISM's list of commodities rising in price for a ninth month in the October services survey.
- Bitcoin perpetual funding and leveraged demand around the next Fed decision, the market evidence CryptoSlate says the funding-risk case still needs.
- Whether domestic new orders follow export orders below 50 in October, a move that would put the slowdown ahead of cost breadth in the Fed's data.
Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence72
- Adoption
- Not scored
- Hype gap+20
- Incentives
- Not scored
- Confidence66
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
The Institute for Supply Management's services report, released October 5, put the September prices index at 74.0, up from 72.6 in August.
- [2]
The 74.0 reading was the prices index's highest since July 2022, when it reached 74.5.
- [3]
The headline services PMI eased to 54.9 from 55.4.
- [4]
The business activity index dropped to 56.5 from 61.7, still above the 50 expansion threshold.
- [5]
The headline Services PMI fell 0.5 percentage point to 54.9, its 27th consecutive month in expansion territory, with readings above 50 indicating growth.
- [6]
ISM's prices gauge is a diffusion index describing the direction and breadth of monthly input-cost changes; its 74.0 reading provides no estimate of the size of price increases and cannot be read as a consumer-inflation rate.
- [7]
Fed Vice Chair Philip Jefferson said on October 1, before the services release, that inflation risks tilted upward.
- [8]
Jefferson described September's quarter-point increase in the federal funds target range to 3.75%-4.00%.
- [9]
Jefferson said future adjustments should depend on the data, the outlook and the balance of risks.
- [10]
No industries reported a decrease in prices paid during September.
- [11]
Tariffs and fuel costs were the most cited pressures on supply chains, according to Steve Miller, chair of ISM's Services Business Survey Committee.
- [12]
"Fuel costs were mentioned twice as often as any other single issue impacting performance," Miller said in a statement.
- [13]
Fuel appeared on the commodities-up-in-price list for an eighth consecutive month, alongside diesel, gasoline, petroleum-based products, copper, steel and memory products.
- [14]
The new orders index slipped 1.1 percentage points to 59.8, remaining in expansion for the 16th consecutive month.
- [15]
The backlog of orders index rose one percentage point to 56.6, its highest reading since July 2022.
- [16]
Supplier delivery times rose to 53.2, indicating slower deliveries for the 22nd consecutive month, with Miller noting tariff-related delays were extending lead times.
- [17]
New export orders dropped below 50 for the first time in eight months, registering 46.9.
- [18]
Construction was one of four services industries reporting contraction in September; a construction respondent said rising interest rates had sidelined much of the buyer pool, with roughly half of those seeking purchases failing to meet qualification thresholds.
- [19]
The CFTC explains that margined virtual-currency futures traders can be forced to replenish collateral or close positions when markets move against them.
- [20]
Coinbase's documentation describes perpetual funding as payments between long and short positions that help align perpetual prices with spot prices.
- [21]
Bitcoin perpetual funding needs its own market observation and cannot be inferred from the federal funds target, according to CryptoSlate.
- [22]
A February 2023 New York Fed study using intraday data found Bitcoin largely disconnected from monetary and macroeconomic news in its sample.
- [23]
Bitcoin traded near $85,580 on CryptoSlate's October 6 page, down 0.04% over 24 hours.
- [24]
CryptoSlate says the rolling 24-hour change cannot identify a reaction to the ISM release.
- [25]
September's prices index reading is 0.5 points below the July 2022 reading of 74.5.
- [26]
Business activity fell 5.2 points while the headline services PMI fell 0.5 points.
- [27]
The prices index rose 1.4 points from August to September.
- [28]
Before September's quarter-point increase, the federal funds target range was 3.50%-3.75%.
- [29]
Bitcoin's 24-hour change on CryptoSlate's October 6 page was about $34.
- [30]
Employment rose from 47.8 to 50.1, returning to slight expansion after two months of contraction, according to CryptoSlate.
- [31]
The employment index climbed 2.3 percentage points to 50.1, ending a three-month stretch of contraction; Steve Miller attributed the uptick in part to growing backlogs and elevated levels of business activity.
- [32]
CryptoSlate says the funding-risk case would strengthen if adverse policy or yield repricing coincided with weaker leveraged demand, and that easing cost pressure, stable rate expectations or stronger buying without leverage would weaken it.
Sources
2 independent publishers whose own reporting we read for this story.
- cryptoslate.comUS services price gauge hits a four-year high, clouding Bitcoin’s rate-relief outlook
1 article · October 6, 2026
- qz.comU.S. services sector's price gauge hit a four-year high in September as growth cooled
1 article · October 6, 2026
Topics and entities
Entities
- Institute for Supply Management
- ISM Services PMI
- CFTC
- Philip Jefferson
- Bitcoin
- Coinbase
- Federal Reserve Bank of New York
- Federal Reserve