US ISM Services Prices (Sep) 74.0 vs Exp. 73.3 (Prev. 72.6)

The prices-paid component of the services ISM has historically been the print within this survey that moves the front end, because it feeds directly into the pipeline read on services inflation that central banks weight most heavily in the disinflation debate. A third consecutive firm reading of this kind, running at levels well above those associated with stable inflation, has in past episodes pushed back expectations for easing and steepened the front of the curve even when the headline index is soft. The distinction that matters is between prices paid and the new orders and employment subcomponents: when the former is firm while the latter weaken, that is the stagflationary combination that has tended to give central banks the least room to cut. The follow-ons are the producer price and core PCE releases later in the month, and whether officials in their commentary treat this survey's prices series as corroboration of the inflation persistence they cite. As a single survey component the signal is directional rather than decisive, but it adds to a run of firm price prints.