US services growth slowed in October while a longer-term measure of price pressures rose to its highest level since April 2023, according to the Institute for Supply Management’s (ISM) October services report released Nov. 4. The combination complicates the case for rate relief that could support Bitcoin.
Services activity remains in expansion
The headline ISM services PMI fell to 54.5 from September’s 54.9. The reading remained above 50, indicating that services activity was still expanding, though at a slower pace.
Business activity and new orders eased to 53.8 and 55.9, respectively. The employment index rose to 51.4, showing stronger hiring alongside softer demand measures.
Prices index: monthly decline, longer-term high
The monthly prices index eased to 73 from 74. However, its 12-month average rose to 69.2, the highest since April 2023. ISM’s diffusion indexes measure the direction and breadth of reported changes, not inflation rates in percentage terms. A prices reading of 73 summarizes survey responses, while the rolling average summarizes that pressure across a longer window.
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, leaving the eventual effect on consumer inflation uncertain.
Federal Reserve and Bitcoin link
The Federal Reserve held its target range at 3.75%-4% on Oct. 28, before the services release. The central bank statement described inflation as elevated and said additional information would help determine the appropriate policy stance.
The possible benefit of softer activity runs through easier rate expectations and investors’ willingness to take risk. Persistent cost pressure complicates that route to relief. Establishing a change in financial conditions requires evidence of how markets price the outlook, beyond the survey itself.
An IMF working paper published in August 2023 found that US monetary tightening reduced a common crypto-price factor—shared movements across crypto prices—through investors’ willingness to take risk, similar to the channel operating in equities. That historical finding explains a plausible exposure, with any Bitcoin reaction to this particular survey requiring separate market evidence.
Next checkpoint
The next scheduled US checkpoint is the October employment report, due Nov. 6. As of Nov. 5, those results remain ahead and could change the balance between the growth and inflation concerns facing policymakers.
The test now is whether incoming data are followed by easier rate expectations and lower yields, which would strengthen the case for relief. Stronger Bitcoin buying without leverage could offer separate support through demand.
