Rising ISM Services Prices Paid Index Signals Higher US Inflation Ahead

Leading indicators point to higher U.S. inflation. The ISM Services Prices Paid Index rose 2.3 points in August to 72.6, its highest level since July 2022. Since February, the index has climbed 9.6 points, its largest six-month increase since May 2025.
Historically, this metric has led CPI inflation and core PCE inflation by approximately six months. If that historical relationship holds, the current reading suggests CPI could rise as high as 6.0% in the coming months, from 3.4% in July, while core PCE could increase above 4.0% from July's reported 3.3%.