How about some good news? Anybody interested in that? Not really? I didn’t think so.

On a day when a spate of labor market indicators argued fairly persuasively for a slowdown narrative, an update from ISM on the biggest part of the world’s largest economy suggested pervasive gloom and doom might be at least a bit overdone.

The marquee gauge of US services sector activity printed 52 for August, better than consensus and a multi-month high.

That was good enough on its own (although not really something to write home about), but the big surprise was a near 6ppt jump on the new orders gauge which, at 56, is now solidly in expansion territory and the highest since October of 2024.

As the figure shows, the sequential increase was the most pronounced in 11 months.

That, together with a respectable print on the production subindex, is the good news.

The bad news is that the employment gauge remained very weak at just 46.5, basically unchanged from the prior month.

As the figure below shows, the metric’s been stuck below the 50 demarcation line separating expansion from contraction for three straight months and six of the last seven.

At the same time, the prices gauge printed 69.2 for August, down a touch from July but way too high to be consistent with on-target inflation all the same.

That combination — subdued hiring and pervasive price pressures — is stagflationary.

“August’s services PMI showed greater strength, driven by faster expansion rates for the Business Activity and New Orders indexes,” survey director Steve Miller said, summing up. “Offsetting these positive indicators, however, are continued contraction in the Employment Index, a 16-year low for the Backlog of Orders Index and the Prices Index remaining near 70%.”

The word “tariff” came up 14 times in the release. As a panelist in retail put it, “all decision making is currently dominated by tariff considerations.”