Summary of ISM Non-Manufacturing PMI and Factory Orders Data

Date: June 3, 2026

Key Economic Indicators Released

• ISM Non-Manufacturing PMI: 54.5 (Expected: 53.7; Previous: 53.6)
• ISM Non-Manufacturing Prices Index: 71.3 (Previous: 70.7)
• ISM Non-Manufacturing Employment: 47.9 (Previous: 48.0)
• ISM Non-Manufacturing Business Activity: 57.7 (Previous: 55.9)
• ISM Non-Manufacturing New Orders: 57.3 (Previous: 53.5)
• Factory Orders (April): 4.8% (Expected: 4.6%; Previous: 1.8%)
• Factory Orders ex Transportation: 1.3% (Previous: 1.8%)
• Durable Goods Orders ex Transportation: 1.1% (Previous: 1.1%)
• Durable Goods Orders ex Defense: 8.1% (Previous: 8.1%)

Market Commentary

The latest data presents a positive outlook for the US economy, particularly in the service sector, while also raising concerns regarding inflation and interest rate expectations.

Service Sector Acceleration

The ISM Non-Manufacturing PMI at 54.5 indicates that the US service sector is not only maintaining its expansion but is likely accelerating. This is a significant indicator of economic health.

Persistent Inflationary Pressure

The ISM Non-Manufacturing Prices Index rose to 71.3, signaling ongoing price pressures in the services sector. This is critical for the Federal Reserve, as inflation in services tends to be more persistent than in goods.

Strong Demand Components

Demand indicators within the ISM report show robust growth, with business activity increasing to 57.7 and new orders rising to 57.3. This suggests that the growth in services is driven by actual demand rather than just price increases.

Weak Spot in Employment

Despite the positive indicators, the employment component remains a concern, with a slight decline to 47.9, indicating potential weakness in job growth within the services sector.

Solid Factory Orders

Factory orders showed a month-on-month growth of 4.8%, surpassing expectations. However, when excluding transportation, the growth was only 1.3%, indicating a softer performance in this less volatile category.

Market Reaction

Despite the positive surprises in the data, market reactions have been moderate, with the EUR/USD trading within a narrow price channel.

Conclusion

The data released on June 3, 2026, reflects a mixed but generally positive picture of the US economy, highlighting growth in the service sector and factory orders while also signaling persistent inflationary pressures that could influence future monetary policy.