Business activity in the U.S. grew at the fastest pace in over four years in August, driven by increased demand and more optimistic expectations, which also stimulated hiring.
The S&P Global Flash US Composite PMI index rose to 56 in August — the highest level since April 2022, according to data released on Friday. A reading above 50 indicates growth in business activity.
“Business in the U.S. is thriving, with companies reporting the fastest growth in production in over four years”, said Chris Williamson, chief business economist at S&P Global Market Intelligence.
Hiring picked up
Williamson noted that employment growth also showed a noticeable pickup in August as employers became more confident amid easing concerns about the negative economic impact of tariffs and the conflict in the Middle East.
According to the report, companies increased their workforce at the fastest pace since January 2024. Hiring accelerated in both the manufacturing sector and the services sector, with particularly strong growth in employment among service providers.
Activity in the services sector rose to 56.8, corresponding to the highest level since March 2022. The revival in the services sector helped offset slower growth in the manufacturing sector.
Meanwhile, the manufacturing index fell to 53.2 — a five-month low, although it remained in growth territory. Production was constrained by raw material shortages and supply chain delays.
Price pressures eased, but risks remain
Meanwhile, price pressures eased. Production costs in August rose at the slowest pace since the start of the war in Ukraine. The expected future production index rose to a nine-month high.
However, according to Williamson, the conflict in the Middle East “remains a key issue for businesses, especially due to its impact on supply chains and energy prices”.
He also warned that price pressures, despite easing, “remain elevated and could intensify again if energy prices rise”.
