Economic Buzz: US business growth and hiring accelerate in August
Growth was seen across both manufacturing and service sectors of the economy. Hiring also picked up. Job creation reached one of the highest rates seen over the past three years as companies reported the largest build-up in uncompleted work since May 2022.
Business confidence in the outlook meanwhile improved but remained much weaker than seen at the start of the year as companies reported ongoing concerns over the impact of government policies, especially in relation to tariffs.
Tariffs were again widely cited as the principal cause of sharply higher costs, which in turn fed through to the steepest rise in average selling prices recorded over the past three years.
The headline S&P Global US PMI Composite Output Index rose to an eight-month high in August, edging up from 55.1 in July to 55.4, according to the 'flash' reading. Output has now grown continually for 31 months, with the latest two months seeing the strongest back-to-back expansions since the spring of 2022.
A sustained robust expansion was reported in the services economy, albeit with business activity growth dipping slightly from July?s year-to-date high. Sales growth in the sector nevertheless gathered pace to register the steepest improvement in demand for services since last December, assisted by a modest return to growth of services exports. Companies reported improved confidence from customers and new product offerings.
The ongoing service sector expansion was accompanied by a marked acceleration of output growth in the manufacturing sector, where production surged after a slowdown in July to register the steepest monthly rise since May 2022.
The S&P Global US Manufacturing PMI rose from 49.8 in July to 53.3 in August, according to the flash reading, signaling a renewed improvement of factory business conditions after a brief deterioration in July. August?s reading was the highest since May 2022. Production rose for a third successive month, rising at a pace not recorded since May 2022, buoyed by the largest influx of new orders since February 2024.
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