US services growth slowed in October, but the survey's 12-month average prices index reached its highest level since April 2023. Persistent cost pressure complicates the case for rate relief that could support Bitcoin.
The Institute for Supply Management's October services report, released Nov. 4, put the headline PMI at 54.5, down from September's 54.9. The reading stayed above 50, which indicates services activity was still expanding.
However, price pressure did not fade with it. The monthly prices index eased to 73 from 74, but its 12-month average rose to 69.2, the highest since April 2023.
Softer demand, firmer hiring
Business activity and new orders eased to 53.8 and 55.9, respectively. The employment index, however, rose to 51.4, so hiring strengthened alongside softer demand measures.
ISM's diffusion indexes measure the direction and breadth of reported changes, not the size of price changes. A prices reading of 73 therefore does not mean 73% inflation.
ISM said tariffs and fuel costs were the most frequently cited supply-chain issues. Some respondents had not yet passed higher costs through to customers, which leaves the eventual effect on consumer inflation uncertain.
The Bitcoin link runs through policy expectations
The Federal Reserve held its target range at 3.75%-4% on Oct. 28, before the services release. Its statement described inflation as elevated.
Softer activity could help Bitcoin through easier rate expectations and investors' willingness to take risk. Persistent cost pressure complicates that route, and CryptoSlate notes that any Bitcoin reaction to this particular survey would need separate market evidence.
The next scheduled checkpoint is the October employment report, due Nov. 6. Its results could change the balance between the growth and inflation concerns facing policymakers.
Source: CryptoSlate
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