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The story in brief
On October 5, 2026, the Institute for Supply Management’s Services PMI eased to 54.9 in September from 55.4, extending the services sector’s run of expansion to 27 months. The report showed slower business activity, employment just above the 50 expansion threshold at 50.1, growing backlogs (56.6), a jump in the prices index to 74.0 (highest since July 2022), and new export orders slipping into contraction at 46.9.
Key takeaways
- Services sector still expanding but at a slower pace.
- Price pressures intensified, with the prices index at 74.0.
- Employment returned to slight expansion while export orders contracted.
Mortgage-market context
If services inflation remains elevated, the Federal Reserve may be less inclined to cut policy rates—this can keep mortgage rates higher. Conversely, easing service-sector growth could reduce rate pressure; these are general policy relationships, not forecasts.
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