U.S. business activity climbs to 27-month high in July; pricing power diminishing
inflation outlook.
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S&P Global said on Wednesday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, edged up to 55.0 this month. That was the highest level since April 2022 and followed a final reading of 54.8 in June.
A reading above 50 indicates expansion in the private sector. A pick-up in the services sector offset an easing in the manufacturing industry.
Average prices charged for goods and services rose at the slowest rate since January and are now at levels that S&P Global viewed as consistent with the Federal Reserve's 2% inflation target. The moderation corroborates reports from major retailers about consumers pushing back against higher prices and suggests that inflation was on a downward trend after consumer prices fell for the first time in four years in June.
The steady rise in the composite PMI implied that economic activity remained on solid footing at the start of the third quarter. The government is expected to report on Thursday that gross domestic product increased at a 2.0% annualized rate in the second quarter, picking up from the January-March quarter's 1.4% pace, a Reuters survey of economists showed.
«The flash PMI data signal a 'Goldilocks' scenario at the start of the third quarter, with the economy growing at a robust pace while inflation moderates,» said Chris
