U.S. private sector growth reaches 27-month high in August
This was shown by the seasonally adjusted IHS Markit Flash U.S.
Composite PMI Output Index rising from July’s reading of 54.6 to 56.0, to indicate the fastest growth of overall activity since May 2015.
Driving the headline composite index higher was a sharp increase in service sector business activity in August (‘flash’ business activity index at 56.9, up from 54.7 in July).
This contrasted with a slowdown in manufacturing production growth (‘flash’ output index at 52.2 in August, down from 54.1).
In line with the trend for overall activity, total new orders also expanded at a quicker pace in August.
Moreover, new business volumes grew at the quickest pace for just over two years.
At the same time, companies continued to add to their payroll numbers in August, with the rate of job creation unchanged from July’s seven-month record.
Input costs rose further at US companies in the latest survey period, with the rate of inflation picking up to a four-month high.
This in turn contributed to a further hike in average selling prices, which rose at the fastest pace in nearly three years.
Services PMI Business Activity Index1 posted 56.9 in August, up from 54.7 in July, to signal the quickest expansion of services activity for 28 months.
According to anecdotal evidence, strong economic conditions and an improvement in client demand had driven the latest upturn in activity.
The latter was highlighted by a sharp and accelerated rise in new business received by services companies, with the rate of new order growth reaching a 25-month high in August.
Greater intakes of new work and rising activity levels led firms to hire more staff in August. ■