Anyone unlucky (or junior) enough to be chained to a Bloomie the day after a long US holiday weekend got everything they could’ve reasonably wanted out of Monday’s only notable macro release.
The marquee gauge of US services sector activity printed bang in line with estimates at 54 on the headline for June.
So it’s official now: Both ISM gauges spent the first six months of 2026 in expansion territory.
As a quick reminder: The factory-side headline has a pretty tight historical relationship with the SOX. And as JonesTrading’s Mike O’Rourke noted in his latest, the SOX has actually added more market cap this year than the S&P.
Coming quickly back to ISM services, both the production and new orders gauges slipped from May (and the latter missed estimates by a fairly wide margin), but both remain north of 55, indicative of brisk activity and solid demand.
The real good news came from the prices-employment conjuncture, which improved meaningfully. The hiring index printed in expansion territory for the first time since February, jumping more than 3ppt to 51.2.
The prices index, meanwhile, moved below 70 for the first time since the war started.
I’ll say the same thing I said last week about the prices-employment conjuncture on the factory side: The current situation’s not ideal, but we’re moving in the right direction on both fronts.
The expansion-territory print from the services employment index on Monday doesn’t entirely mitigate the gut punch from the BLS, which last week said leisure and hospitality shed the most jobs in June since 2020, a result that stunned economists who expected the sector to benefit from the World Cup. The ISM release, by contrast, said “World Cup-related hiring likely contributed to the increase on the employment index.”
Speaking of leisure and hospitality, an ISM panelist anecdote from someone in Accommodation & Food Services is worth quoting. “We continue to experience higher prices due to the Persian Gulf conflict through rising diesel fuel costs and increased input costs for resin-based packaging,” the respondent complained. “The brunt of the impact will be experienced in the third quarter, but we are feeling the impact now [as] suppliers are aggressively attempting to pass through price increases.”
It was all worth it for the MOU.
