US Service Sector Drives Business Activity Surge in August, Says S&P Global

A powerful rebound in U.S. services activity has set the economy on a faster growth trajectory, even as manufacturing faces headwinds from geopolitical and supply-chain pressures.

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A Services Sector on Fire

S&P Global’s flash U.S. Services PMI leapt to 56.8 in August, marking the fastest growth in nearly two years and the highest reading since December 2024 . New business surged, backlogs expanded, and hiring accelerated—services firms added staff at the strongest pace in months . Business confidence also rose for a third consecutive month, underpinned by stronger demand and easing geopolitical anxieties .

Composite Index Signals Broad-Based Expansion

The S&P Global Composite Output Index, which blends services and manufacturing, climbed to 56.0 in August from 54.5 in July—its highest level since April 2022 . S&P’s Chris Williamson called it "the fastest output growth for over four years so far in the third quarter," noting that the data point to annualized GDP growth approaching 3%, up sharply from the 1.5% pace in Q2 .