Supply Chains Behave While Prices Misbehave | S3 E156 | 08-05-26
The July ISM Services report is in, and it’s giving the Fed a mixed signal ahead of its September rate decision. Megan Horneman breaks down why the headline number came in slightly below expectations, what eased supply chain pressures actually tell us, and why the prices paid component just jumped back above 70 for the fourth time in five months.
At the same time, the employment component fell back into contraction territory, something it’s now done in 12 of the past 18 months. That combination of rising prices and a softening labor market is exactly the kind of tension the Fed has to weigh next month, and with the big jobs report landing Friday, this week’s data matters more than usual.
In this episode, Megan covers:
📊 Why the ISM Services Index dipped slightly below expectations in July
🔗 How easing supply chain and delivery pressures affected the headline number
💲 Why the prices paid component jumped back above 70, a level hit in four of the last five months
👷 Why the employment component fell back into contraction, its 12th sub-50 reading in 18 months
🤖 How AI adoption and lower-cost hiring locations are showing up in the data instead of new payrolls
📈 Why 17 industries reported higher prices in July, with none reporting declines
If you’re trying to make sense of what the Fed will be watching before September, this one’s worth five minutes. Hit subscribe so you don’t miss Friday’s jobs report breakdown.
For a history of all Markets with Megan episodes, visit: https://marketswithmegan.FM
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