Supply Chain Stress Is Back in Services | S3 E172 | 10-05-26
The September ISM Services Report showed the service sector, where Americans spend most of their money, ending the third quarter on a softer note. Megan Horneman explains why business activity and new orders slipped while the prices paid component jumped to its highest level since July 2022.
Supply chain pressure tied to the war with Iran, along with tariffs and high fuel costs, is showing up in industries from construction to agriculture. Bond yields rose on the report, and the data likely won’t change the Fed’s October decision but does raise the odds of another hike in December.
In this episode, Megan covers:
- Why the services composite slipped in September and still sits in expansion territory
- Where the weakness showed up: business activity, new orders, and a steep drop in export orders
- Prices paid at the highest since July 2022 and order backlogs at their highest since 2022
- How diesel costs are driving up freight and pushing nitrogen prices near record highs for farmers
- Why construction firms say half of buyers walking in can’t qualify at current interest rates
- What rising yields signal for the Fed’s October meeting and the odds of a December hike
Keeping up with every data release takes time you may not have. Megan sorts out what matters in about five minutes, so listen in and subscribe to catch the next one.
For a history of all Markets with Megan episodes, visit: https://marketswithmegan.fm
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