Take a snapshot of the U.S. economy in July and the services side still looked healthy.
The Institute for Supply Management, known as ISM, published its latest services survey on August 5, 2026.
The group watches a broad slice of business, from retail stores and construction firms to banks and trucking companies. That makes the report a useful check on how everyday companies are feeling. Because the survey covers so many industries, it is a key gauge for investors tracking whether the service side of the economy can keep carrying growth.
Any reading above 50 means more businesses are expanding than shrinking.
The details were a little more encouraging.
New orders picked up, and a measure of business activity hit a five-month high.
That points to consumers who are still willing to spend.
Thirteen industries reported growth, including stores, shipping and warehouse operators, and builders. Only four shrank.
International trade improved as well. Import and export gauges hit their strongest levels since April.
Order backlogs grew only a little. That suggests demand is solid but not running hot.
The healthy demand is coming with a cost problem. Companies kept saying they are paying more for services and materials.
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Higher costs are hitting profits and consumers, and some businesses are holding back on hiring. The employment gauge showed the biggest drop in staffing since March.
Construction companies said sales are still falling despite more discounts, and they face cost pressure from many fronts.
Management and support services firms, on the other hand, said business is improving, especially among smaller firms.
Transportation and warehousing companies described conditions as mostly unchanged, but said fuel and labor costs keep pushing their prices up.
Finance and insurance firms said conditions are stable and commercial client demand is healthy. Businesses are still cautious, though, because of uncertainty about rates and inflation.
Public administration respondents said they are watching the Iran conflict for its effect on oil and construction materials. That could spill into city capital projects.
The Federal Reserve's rate-setting committee, known as the FOMC, meets in September. That meeting now has mixed data to chew on.
On one side, hiring is cooling. On the other, prices are heating up again.
Bloomberg Economics' Andrew Sacher said the weak employment reading is a reason for patience, while the jump in prices keeps another interest rate increase possible.
Across the survey, respondents sounded less nervous than before. ISM's Steve Miller said tariffs and the Middle East conflict came up much less often, while respondents again cited the World Cup as a boost to business and new orders.
"Overall, the US services economy continues to be resilient," Miller said.
Taken together, the July survey and the upcoming jobs report form the backdrop for the Fed's September decision. The employment gauge falling to its weakest since March points to slower hiring, while the prices-paid index jumping to 70.3 points to renewed inflation. That tension is why patience and a possible hike are both still on the table.
For investors, this kind of report is a mixed blessing. The economy is growing, but the costs that come with it are creeping back up.
The important question is what the Fed does next. If prices keep climbing, the central bank has less room to cut rates, but if hiring keeps slowing, it has more reason to consider cuts.
Wholesale trade companies said business was stronger than expected. Lumber supply is tight and freight rates are hard to lock in, but they called the outlook for the rest of 2026 favorable.
Friday's jobs number and the September FOMC meeting will tell you a lot about where the economy goes from here. Together they will also shape what the rest of the year looks like for your money.
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