The US services sector is sending mixed signals: ISM Services PMI rose +1.3 points in August, to 55.4, its 2nd-highest reading since October 2024. 12 industries reported growth, including mining, real estate, and accommodation and food services, while 5 industries saw contraction. The increase was driven by new orders, which surged +3.7 points, to 60.9, the highest level since February 2023 and significantly above the 56.6-point average since 1997. Meanwhile, prices paid jumped +2.3 points, to 72.6, their highest since July 2022. At the same time, the employment index came in at 47.8, remaining in contraction for the 2nd consecutive month and in 5 of the last 6 months. The services sector is growing, but pricing pressures are building.(The Kobeissi Letter)