S&P Global flash U.S. composite index rises to 56.0 in August
S&P Global said its flash U.S. composite output index rose to 56.0 in August from 54.5 in July, the strongest reading since April 2022, while services strengthened and manufacturing eased.
American business activity is expanding at its fastest pace in more than four years.
S&P Global said Friday that its flash U.S. composite output index — a widely followed monthly survey of purchasing managers at about 1,150 factories and service firms — rose to 56.0 in August from 54.5 in July, the strongest reading since April 2022.
Readings above 50 indicate expansion.
The survey now points to third-quarter growth approaching 3% on an annualized basis, up from the 1.5% pace recorded in the second quarter. "U.S. business is booming, with firms reporting the fastest output growth for over four years so far in the third quarter as the expansion picked up further momentum in August," said Chris Williamson, chief business economist at S&P Global Market Intelligence.
Hiring Accelerated, Inflation Eased: That's Good News The services business activity index jumped to 56.8 from 54.6, a 20-month high and the fastest expansion since December 2024. "Jobs were added at the fastest rate since the start of last year as increasingly confident companies took on more staff to meet higher demand," S&P Global said.
Business output expectations improved for a third straight month to a nine-month high.
Input cost inflation ran at its slowest since February.
Prices charged rose at the weakest pace since November, a ten-month low in services and a six-month low in manufacturing.
Fewer firms reported passing through higher fuel and energy costs.
Manufacturing went the other way.
The flash factory output index fell to 51.9 from 53.9, a 13-month low, and the headline manufacturing PMI slipped to 53.2 from 53.9, the weakest since March, though still among the higher readings of the past four years.
S&P Global attributed the factory slowdown to two things.
Safety-stock building, which had powered goods production in the early months of the war, is now fading.
And supply chain delays lengthened again in August to one of the greatest extents in four years, blamed on shipping disruption, tariffs and thin inventories at suppliers.
Input buying by manufacturers rose only slightly, the smallest increase this year.
Purchases of inputs fell outright for the first time since February.
That combination — accelerating growth with cooling selling prices — is the friendlier version of the data for equity investors, and it lands with the SPDR S&P 500 ETF Trust (NYSE: SPY ) near record levels.
The Invesco QQQ Trust (NASDAQ: QQQ ) has gained 25% over the past year.
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