The marquee gauge of activity in the biggest part of the world’s largest economy suggested demand was robust last month, even as an underlying measure of hiring slipped back into contraction.

That was the message from Wednesday’s ISM services update, which printed 54.1 on the headline, in line with consensus.

With both readouts for July now on the books, it’s official: Both sides of the economy spent a seventh straight month in expansion territory together.

Notably, the manufacturing print was the stronger of the two headlines for July. Long the laggard in an economy dominated by services, the US factory sector’s now enjoying an expansion broader than that witnessed on the services side.

The new orders gauge in Wednesday’s release came in at 57.2, among the five best readings in more than two years. The main business gauge — i.e. the services-side equivalent of the manufacturing production index — rose to 60.5, the second-best reading since May of 2024.

That’s the good news. The less-good news: The employment index slipped back below 50, to 47.4. It’s spent four of the last five months in contraction territory.

The prices index rose back above 70, although as survey director Steve Miller noted, “the number of commodities reported as down in price increased to six, up from three the previous month.”

The respondent anecdotes were generally mixed in terms of sentiment. Panelists mentioned AI and immigration while editorializing around the employment picture.

Miller summed it up. “Tariff impacts and the Mideast conflict continued to be mentioned by respondents, but much less frequently than in prior reports,” he said. “Overall, the US services economy continues to be resilient [although] concerns still exist regarding mortgage rates, inflation and pricing impacts due to the recent run-up in petroleum costs.”