The US composite final rose to 54.6, higher than July (54.3) and the flash estimate (54.1). This indicates the economy is expanding and at a faster rate than in July. It also suggests that the latter half of August performed better than the earlier half.

The faster pace is partly due to an increase in output and new orders from the services sector where, however, employment fell. Input costs continued to increase in August.

The US services PMI rose to 55.7, higher than in July (55.0) and the flash estimate (55.2). This likewise suggests the sector is expanding and that the latter half of August performed better than the earlier half of the month.

Higher new orders and success in securing new customers were linked to the rise in business activity in August. Service providers are again optimistic that business activity will rise over the coming year, with confidence reflecting expectations that new orders will continue to increase.

The US RPI and RPI-P both stand at minus 5. Economic activity is generally within market forecasts.

No change at the mid-month's 55.2 is the consensus for the services PMI's August final. This index ended July at 55.0. The composite flash is also expected to be unchanged from the first estimate, at 54.1.

US Services Purchasing Managers' Index (PMI) is based on monthly questionnaire surveys collected from over 400 U.S. companies which provide a leading indication of what is happening in the private sector services economy. It is seasonally adjusted and is calculated from seven components, including New Business, Employment and Business Expectations.

Investors need to keep their fingers on the pulse of the economy because it indicates how various types of investments will perform. The Markit Services PMI provides advance insight into the services sector, which gives investors a better understanding of business conditions and valuable information about the economic backdrop of various markets. The stock market likes to see healthy economic growth which generally translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures. The PMI data are also used by many Central Banks to help make interest rate decisions.

The IHS Markit Services Flash data give a detailed look at the services sector, the pace of growth and the direction of this sector. Since the service sector accounts for more than three-quarters of U.S. GDP, this report has a significant influence on the markets. In addition, its sub-indexes provide a picture of new business, employment, business expectations and prices.