| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 53.6 | 53.6 to 53.6 | 54.5 | 51.9 |
| Services Index | 53.6 | 53.6 to 53.6 | 54.6 | 51.2 |
Highlights
The S&P Global US Composite Purchasing Managers’ Index final reading came in at 54.5 in July compared to 51.9 in June, and 51.5 in May. This is the strongest growth rate since October 2025, with a sharp rise in service sector activity and a solid, albeit softer, increase in manufacturing output to kick off Q3.
Business confidence in the outlook for the coming year was the strongest since November 2025. Private sector employment rose for the first time since April, however, input price inflation accelerated to the highest since November 2022. This in turn fueled composite selling prices by the quickest pace in exactly one year.
The US Services PMI Business Activity Index recorded 54.6 in July, compared to 51.2 in June, and 50.7 in May, above expectations of 51.2 in the Econoday survey of forecasters. The end of the FIFA World Cup and resumption of the Iran conflict might make this a short-lived spike in activity.
Nevertheless, business sentiment improved from June, with expansion plans and new product launches cited as key drivers. Companies also hoped for improved domestic and geopolitical conditions.
On the employment front, increased new orders and a more positive outlook powered a rise in hiring at the start of the third quarter. “Although only marginal, the rate of job creation was the strongest for eight months,” S&P said.
As for inflation, overall costs rose at the fastest pace since May 2025, fueled by tariffs, higher raw material prices and fuel costs. As a result, firms – were possible – passed those higher costs on to clients through increased selling prices. “Charge inflation remained above its long-run trend and accelerated to a 14-month high in July,” the report said.
The Manufacturing PMI’s final reading came in at 53.9, compared to 53.9 in June, and 55.1 in May.
Market Consensus Before Announcement
The composite and services PMI are both expected unrevised at 53.6 in the July final from the flash. That would be up from 51.9 for composite and 51.2 for services in the June final.
Definition
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.
Description
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.