The US private sector expanded at its fastest pace in eight months during July, according to the S&P Global flash US PMI data. The composite output index climbed to 53.6, up from 52.7 in June, marking the strongest reading since November 2024. Both manufacturing and services contributed to the gain.
Manufacturing Growth Accelerates
The manufacturing PMI hit 53.8 in July, a solid reading that signals expansion. That's up from 52.2 in the prior month. The data suggests factory activity is picking up speed, with new orders and production both rising. The index has now stayed above the 50 threshold — which separates growth from contraction — for several months.
Services Sector Holds Steady
The services PMI came in above 53, though the exact figure wasn't specified in the flash release. Services have been a key driver of the broader economy, and the latest reading indicates continued growth. The composite index, which combines manufacturing and services, reached its highest level since November 2024.
What the Data Means for the Fed
The stronger-than-expected PMI numbers come as the Federal Reserve prepares for its next policy meeting. Officials have been watching economic data closely to gauge whether the economy is cooling enough to bring inflation down. The July PMI suggests the economy is still running at a solid clip, which could influence the Fed's decision on interest rates.
The flash PMI is based on roughly 85% of survey responses and is considered a reliable early indicator of economic activity. The final reading for July is due later this month.
