{"id":65346,"date":"2026-07-24T10:08:12","date_gmt":"2026-07-24T14:08:12","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/u-s-business-activity-hits-eight-month-high-in-july-amid-services-surge\/65346\/"},"modified":"2026-07-24T10:08:12","modified_gmt":"2026-07-24T14:08:12","slug":"u-s-business-activity-hits-eight-month-high-in-july-amid-services-surge","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/u-s-business-activity-hits-eight-month-high-in-july-amid-services-surge\/65346\/","title":{"rendered":"U.S. Business Activity Hits Eight-Month High in July Amid Services Surge"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>U.S. Composite PMI Output Index climbed to 53.6 in July<\/strong>, marking an eight-month high and signaling a robust start to the third quarter.<\/li>\n<li><strong>The services sector drove the expansion<\/strong>, with the Services PMI jumping to <strong>53.6<\/strong>, significantly outperforming the consensus estimate of <strong>51.5<\/strong>.<\/li>\n<li><strong>Manufacturing growth showed signs of cooling<\/strong>, as the Manufacturing PMI edged down to <strong>53.8<\/strong>, missing analyst expectations of <strong>54.4<\/strong>.<\/li>\n<li><strong>Inflationary pressures intensified<\/strong> as selling prices rose at the fastest rate in nearly four years, driven by supply chain delays and rising input costs.<\/li>\n<li><strong>Business confidence and hiring improved<\/strong>, with firms adding staff for the first time in three months and optimism reaching an eight-month peak.<\/li>\n<\/ul>\n<p>U.S. business activity accelerated at the start of the third quarter, fueled by a significant rebound in the services sector. The <strong>S&amp;P Global (<a href=\"\/stock\/SPGI\">SPGI<\/a>)<\/strong> Flash U.S. Composite PMI rose to <strong>53.6<\/strong> in July from <strong>51.9<\/strong> in June, its highest level since last November. This growth suggests the U.S. economy is expanding at an annualized rate of approximately <strong>2.0%<\/strong>, up from the <strong>1.2%<\/strong> pace signaled in the second quarter.<\/p>\n<p>The services sector was the primary engine of growth, with the Services Business Activity Index surging to <strong>53.6<\/strong> from <strong>51.2<\/strong> in the previous month. Analysts noted that consumer spending was likely bolstered by seasonal factors, including <strong>Independence Day<\/strong> celebrations and hospitality demand related to the <strong>FIFA World Cup<\/strong>. This surge in demand prompted service-oriented firms to increase their workforces for the first time since April.<\/p>\n<p>In contrast, the manufacturing sector experienced a slight loss of momentum. The Manufacturing PMI declined to <strong>53.8<\/strong> from <strong>53.9<\/strong> in June, falling short of the <strong>54.4<\/strong> forecast. While the sector remains in expansion territory (above 50.0), factories reported the weakest gains in output and new orders since March. <em>Market participants are closely watching this divergence, as manufacturing has historically served as a leading indicator for broader economic shifts.<\/em><\/p>\n<p>Despite the headline growth, the report highlighted a concerning &quot;intensification&quot; of price pressures. Input cost inflation reached a 14-month high, while selling price inflation approached a four-year peak. S&amp;P Global Market Intelligence Chief Business Economist <strong>Chris Williamson<\/strong> warned that supplier delays have worsened to the greatest extent in nearly four years, largely due to ongoing geopolitical conflicts in the Middle East.<\/p>\n<p><em>The combination of resilient growth and sticky inflation may complicate the Federal Reserve&#39;s path forward.<\/em> While the uptick in hiring is a positive sign for the labor market, the renewed surge in costs could keep interest rates higher for longer. Investors reacted to the data with caution, as the stronger-than-expected services reading suggests the economy may still be running hot enough to warrant a restrictive monetary policy stance.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways U.S. Composite PMI Output Index climbed to 53.6 in July, marking an eight-month high and signaling a robust 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