U.S. business activity hits four-year high in August as hiring accelerates

U.S. business activity surged to its fastest pace since 2022 in August, driven by stronger demand and improved economic sentiment, according to the latest S&P Global flash composite Purchasing Managers Index (PMI). The index climbed to 56, marking the highest reading since April 2022 and signaling robust expansion as figures above 50 indicate growth. The acceleration was fueled by a wave of hiring, with employment growth reaching its fastest pace since January 2025, as businesses gained confidence amid fading concerns over tariffs and the Middle East conflict. “U.S. business is booming, with firms reporting the fastest output growth for over four years,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. Activity in the service sector led the expansion, with the service providers’ PMI rising to 56.8—matching the highest level since March 2022. This offset slower growth in manufacturing, where the PMI dipped to 53.2, a five-month low but still in expansionary territory. Raw material shortages and supply chain delays constrained factory output. Businesses also reported easing input costs, with price pressures expanding at the slowest pace since the start of the Iran war. However, concerns persisted over the Middle East conflict, particularly its impact on supply chains and energy prices. A measure of future output optimism reached a nine-month high, suggesting cautious optimism despite lingering risks. The report underscores a resilient U.S. economy, with hiring accelerating across both manufacturing and services, though service-sector employment growth was notably stronger.