The October ISM Services index is back in expansion territory—coming in above 50—with six out of ten categories rising and new orders leading the charge (likely boosted by data-center demand in the commentary). Business activity jumped, employment is still in contraction but improved, and we’re not seeing shrinking headcount alongside a backlog—hinting at some labor-market equilibrium.

The catch: prices paid just moved to their highest level since October 2022. That’s the inflation channel the Fed watches closely. With ADP showing a modest October improvement and the labor market not collapsing, elevated input costs could feed into CPI/PCE once those reports finally print after the record-long government shutdown.

In this episode:

• ISM Services pops back above 50 (expansion)
• New orders strength—data-center demand in the mix
• Employment still soft, but stabilizing
• Prices paid spike—potential inflation bleed-through
• What this combo could mean for the Fed’s next steps

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https://youtu.be/xvqGfsWRwAA

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