US: ISM Services PMI improves to 56.9 in August vs. 55.5 expected

• US ISM Services PMI improved modestly in August.
• US Dollar Index touched a two-decade high above 110.50 after the data.

The business activity in the US service sector expanded at a slightly stronger pace in August than it id in July with the ISM Services PMI rising to 56.9 from 56.7. This reading came in better than the market expectation of 55.5.

Further detail of the publication revealed that the Prices Pair Index declined modestly to 71.5 from 72.3 and the Employment Index recovered to 50.2 from 49.1.

Commenting on the survey, "the services sector had a slight uptick in growth for the month of August due to increases in business activity, new orders and employment," noted  Anthony Nieves, Chair of the Institute for Supply Management Services Business Survey Committee.

"Based on comments from Business Survey Committee respondents, there are some supply chain, logistics and cost improvements; however, material shortages remain a challenge," Nieves added. "Employment improved slightly despite a restricted labor market."

Market reaction 

The US Dollar Index extended its dally and touched a fresh two-decade high of 110.55 with the initial reaction to the ISM report.