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ISM® PMI® Reports Roundup: December Services

January 07, 2026
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By Dan Zeiger
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The ISM® Services PMI® Report on Wednesday revealed a sector that appeared to be finishing 2025 with a flourish, and how strongly that momentum continues could depend on the degree of the traditional post-holidays hangover.  

The Services PMI® of 54.4 percent — bolstered by all four key subindexes in expansion for the first time in 10 months — was the highest reading of the year. “The details of the report were strong,” MarketWatch noted, and much of the data under the hood confirms that assessment:

  • The Business Activity Index continued to reflect robust growth, up 1.5 percentage points to 56 percent.
  • The New Orders Index registered 57.9 percent, a 5-percentage point gain compared to the previous month and the highest for a December since 2021 (62 percent).
  • The Employment Index (52 percent) returned to expansion for the first time since May (50.7 percent), an encouraging sign amid U.S. Bureau of Labor Statistics data released on Wednesday that showed job openings fell to a 1½-year low in November.
  • Despite continuing tariffs anxieties among survey respondents, the New Exports (54.2 percent) and Imports (50.3 percent) indexes expanded, the former for the first time in six months, the latter for the first time since August.
  • Real Estate, Rental & Leasing, the largest services sector industry, moved from contraction territory to flat, providing a key boost to the PMI®.

As always, there are geopolitical wild cards and X-factors. But the fact that all four subindexes that directly factor into the PMI® (Business Activity, New Orders, Employment and Supplier Deliveries) have been on a upward trajectory over the second half of 2025 is a positive sign for continued growth, said Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee.

“I don’t want to minimize the possibility … but a broader geopolitical event that could create a significant disruption seems unlikely,” Miller said during ISM’s LinkedIn Live broadcast on Wednesday. He added, “I’m confident we’re on a positive path for the summertime and the next few months — fingers crossed.”

The Services data contrasted ISM’s Manufacturing numbers released on Monday, which revealed a December PMI® that was the lowest of the year. Business Survey panelists in both sectors expressed cautious optimism for 2026 in the ISM® Supply Chain Planning Forecast released three weeks ago, but only services has a spring as it stepped into the new year.

During his interviews on Wednesday, Miller was armed with data, pointing out that the average Services PMI® in 2025 of 51.7 percent was the third-lowest ever, above only 2008 and ’09, which both ended in contraction amid the Great Recession. Also, the fourth-quarter PMI® average of 53.1 percent is tied for the second-lowest in the last 10 years, above only Q4 2023 (51.7 percent).

If that’s a storm, the services sector is weathering it. And Miller said the Employment Index reading — even if boosted by holiday seasonal hires — suggests that businesses are making investments that indicate confidence that a post-holiday lull won’t be severe.

Such spending was also indicated in the Inventories Index, which improved to 54.2 percent, up 0.8 percentage point compared to November, while the Inventory Sentiment Index dropped slightly, to 54.1 percent. That could be a sign that companies are stocking up before shipments are slowed by Lunar New Year — but also of confidence in general.

“From a forward-looking standpoint, and especially looking at the employment (data), it doesn’t look like people are expecting a pullback in the first quarter,” Miller said on LinkedIn.

The ISM® PMI® Reports roundup:

Bloomberg: U.S. Services Activity Expands at Fastest Pace in Over a Year. “New orders expanded by the most since September 2024 and a measure of business activity, which parallels the ISM’s factory output gauge, climbed to a one-year high. Export bookings grew at the fastest pace in more than a year. The pickup in demand helped spark the healthiest growth in services employment since February.”

CNBC: Job Openings Slid in November to Lowest in More Than a Year. “On the December read: 54.4 percent, much better than expected and the strongest read of the year,” analyst Rick Santelli said. “To find a stronger read, you'd have to go back to (October 2024, 55.8 percent). … On the (New Orders Index): 57.9 percent, a whopper of a number, much better than expected (and) the best since September 2024.”

Mace News: Services Sector PMI® Hits 14-Month High Mainly on Seasonal Effects but 12-Month Moving Average Still Low. “Asked whether the U.S. services sector is out of the woods yet in terms of the drag from the protectionist U.S. trade policy, Miller said the PMI® at 54.4 percent in December is ‘a big number’ but also noted that the 12-moving average is still low. ‘So, I wouldn’t say we are not out of the woods but certainly sitting on the edge of the woods,’ he said.”

MarketWatch: The U.S. Services Sector Picked Up in December, as Employment Expanded for First Time in Seven Months. “The details of the report were strong. … Economists see the services sector continuing to expand moderately as long as consumer spending holds up. Spending was strong in the third quarter, but there were signs that the pace of consumption might have slowed in the fourth quarter.”

Reuters: U.S. Service Sector Activity Picks Up in December, Employment Rebounds. “The services sector accounts for more than two-thirds of U.S. economic activity. The PMI® suggested strong momentum in the economy heading into the new year, with even a measure of services employment rebounding to 52 percent after contracting for six straight months. The economy grew at its fastest pace in two years in the third quarter, fueled by robust consumer spending.”

In case you missed Monday’s ISM® PMI® Reports Roundup on the release of the December ISM® Manufacturing PMI® Report, you can read it here. For the most up-to-date content on the reports under the ISM® PMI® Reports umbrella, use #ISMPMI on X, formerly known as Twitter.

(Photo credit: Getty Images/Gerenme)

About the Author

Dan Zeiger

About the Author

Dan Zeiger is Senior Copy Editor/Writer for Inside Supply Management® magazine, covering topics, trends and issues relating to supply chain management.