| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 56.0 | 53.6 | ||
| Manufacturing Index | 53.7 | 53.5 to 54.4 | 53.2 | 53.8 |
| Services Index | 53.8 | 52.4 to 53.9 | 56.8 | 53.6 |
Highlights
The S&P Global US Composite Purchasing Managers’ Index preliminary reading came in at 56.0 in August compared to 54.5 in July, and 51.9 in June. This is the strongest growth rate since April 2022, with a sharp rise in service sector activity offsetting a slowdown in manufacturing output in mid-Q3.
Job growth was the fastest since the start of 2025 as “increasingly confident” companies upped hiring to meet higher demand. Business confidence in the growth outlook reached a nine-month high. Price pressures meanwhile moderated, particularly in terms of selling price inflation, but input cost inflation remained elevated due to high energy prices.
The US Services PMI Business Activity Index recorded 56.8 in August, compared to 54.6 in July, and 51.2 in June, above expectations of 53.8 in the Econoday survey of forecasters. “[S]ervice sector activity has revived from the sluggish pace reported in the second quarter to reach the fastest since December 2024,” the report said.
The Manufacturing PMI’s preliminary reading came in at 53.2, compared to 53.9 in July, 53.9 in June and beating expectations for 53.7 in the Econoday survey of forecasters. This is the “weakest improvement in business conditions since March but remaining among the highest readings seen over the past four years.”
Supply delays caused backlogs of work to accumulate again in manufacturing, to levels not seen since 2022. There were also rising backlogs in the service sector, with outstanding orders in August growing at the sharpest rate since May 2022.
On the employment front, hiring rose sharply in August – especially in the service sector, which saw the largest rise since the start of last year. However, manufacturing jobs growth also picked up to the highest since May. The employment gains reflected improved business confidence about the near-term outlook and fuller order books.
Inflation moderated in August, with average input costs measured across both goods and services rising at the slowest pace since February. There was a notable cooling of services cost inflation from July’s 14-month high, while factory input cost inflation moderated for a third month. Nevertheless, both remained elevated by historical standards due to high energy prices, squeezed supply lines, and tariffs.
As input cost inflation dropped to the lowest since the start of the Iran war, selling price inflation also moderated. Average price inflation for goods and services rose in August at the slowest rate since last November, easing to a ten-month low in services and a six-month low in manufacturing. There were fewer reports of the need to pass through higher fuel and energy prices.
Market Consensus Before Announcement
The manufacturing index is seen a bit lower but still well in expansion at 53.7 in the August flash versus 53.9 in the July final. Services expected at 53.8 versus 54.6.
Definition
The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector output by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around 10 days ahead of the final report and are typically based upon around 85 percent of the full survey sample. The report tracks changes in variables such as new orders, stock levels, employment and prices across both manufacturing and services. Production is also tracked, defined as"production" for manufacturing and"output" for services. Results are synthesized into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster output is growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.
Description
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that 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.