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What does the Services PMI measure?
The Institute for Supply Management (ISM) Services PMI is based on a nationwide survey of purchasing and supply executives at service organizations. It reports the direction of business conditions, including activity and prices paid. ISM says its national survey represents the entire United States; regional purchasing reports primarily reflect their own areas and do not feed into the national result. Industry coverage is diversified by NAICS classification and industries’ contribution to GDP. ISM’s methodology overview describes how the report is constructed.
The composite Services PMI is a diffusion index: a reading above 50 indicates expansion, while a reading below 50 indicates contraction. The Prices Index is also a diffusion index, but it summarizes respondents’ reported direction of prices paid rather than measuring the size of price changes.
What does CPI measure?
The U.S. Bureau of Labor Statistics (BLS) defines CPI as “the change in prices paid by consumers for goods and services.” It uses sampled prices and spending-based weights to measure price change over time for a representative basket. CPI-U covers urban consumers; CPI-W covers a subset of wage earners and clerical workers. The chained C-CPI-U is initially preliminary and later revised, while CPI-U and CPI-W are final when issued. BLS’s CPI FAQs explain the measures and their scope.
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A national CPI is an average for its covered population, not a personalized measure. A household whose spending differs from the representative basket can experience a different rate of inflation.
Services PMI vs. CPI: the practical differences
| Question | Services PMI and Prices Index | CPI |
| What is observed? | Survey respondents’ reported direction of business activity and prices paid | Sampled consumer prices for a weighted basket, compared over time |
| Whose experience is represented? | Purchasing and supply executives at service organizations nationwide | Defined consumer populations, chiefly urban consumers for CPI-U and wage earners and clerical workers for CPI-W |
| How are results expressed? | Diffusion-index points; 50 is the dividing line for expansion or contraction in the relevant index | Price index levels and commonly reported monthly or annual percentage changes |
| What does it say about inflation? | A directional signal of reported cost pressure in services, not an inflation rate | Consumer price change for the covered basket |
| Key limitation | Survey answers are not actual transaction-price changes or a consumer basket | The average may not match an individual household’s spending pattern |
Does a Services PMI Prices Index of 74 mean prices rose 74%?
No. ISM’s September 2026 report put the Prices Index at 74.0, up from 72.6 in August. In the September survey, 50.3% of respondents reported higher prices, 47.5% reported no change, and 2.2% reported lower prices. The 74.0 reading summarizes the breadth and direction of those responses; it does not mean prices rose 74%, or specify the percentage by which they rose. ISM’s September report contains the figures.
What were the latest readings as of October 7, 2026?
At that date, ISM’s latest Services PMI report was for September 2026, while BLS’s latest available CPI release covered August 2026. The figures use different units and should not be read as competing estimates of the same rate.
| Measure | Latest reported value | What the value means |
| ISM Services PMI, September 2026 | 54.9 | Diffusion index reading indicating service-sector expansion; it was 0.5 point below August’s 55.4 |
| ISM Services Prices Index, September 2026 | 74.0 | Diffusion index of surveyed organizations’ reported price direction, not a percent change |
| CPI-U, August 2026 | Up 3.4% over 12 months and 0.3% over one month, not seasonally adjusted | Percentage change in consumer prices for the CPI-U basket over the stated period |
BLS scheduled the September 2026 CPI release for October 14, 2026, so it was not yet available on October 7. The figures above are a dated snapshot, not current readings after that release. The BLS CPI release page publishes the CPI results.
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- They cover different prices. ISM asks service organizations about prices they pay for materials and services. CPI samples prices consumers pay for goods and services in its defined basket.
- They observe different populations. The PMI reflects survey responses from service-sector purchasing and supply executives; CPI represents consumers in its covered population.
- They use different constructions. The PMI Prices Index reflects the distribution of reported price directions. CPI tracks weighted price changes over time.
- They need not move in step. Business input costs and consumer prices can change at different times and rates, and a survey’s directional signal is not the same measurement as a basket’s recorded price change.
Which indicator measures inflation consumers actually pay?
CPI is the more direct indicator for consumer price inflation because it measures changes in prices paid by consumers for a weighted basket. The Services PMI Prices Index is useful for gauging whether surveyed service organizations are reporting increasing or decreasing prices paid, but it is not a consumer inflation measure. Neither national measure should be assumed to describe every household’s experience.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.One date caveat for the September 2026 ISM report
ISM’s report page title displays “September 2025,” while the report body, tables, and “About This Report” section identify September 2026. The figures cited here follow the report body and tables; the discrepancy is worth bearing in mind when checking the page.
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