US Private-Sector Output Grows at Its Fastest Pace Since April 2022 as Services Surge and Hiring Returns

Verified key facts

• The S&P Global Flash US Composite PMI Output Index rose to 56.0 in August from 54.5 in July, its highest reading since April 2022
• The services business activity index jumped to 56.8 from 54.6, a 20-month high, according to S&P Global
• The flash manufacturing PMI fell to 53.2 from 53.9, a five-month low, S&P Global reported
• Private-sector employment rose sharply after little net change over the previous eight months, with the increase the largest since January 2025, per S&P Global
• Outstanding orders accumulated at the fastest rate since May 2022, according to the S&P Global release
• Input cost inflation was the slowest since the start of the Iran war, S&P Global reported
• The survey data point to third-quarter annualised growth approaching 3.0%, up from the 1.5% pace recorded in the second quarter
• Bloomberg reported that supply chain delivery delays lengthened again in August to one of the greatest extents in four years, blamed on shipping disruption, tariffs and thin supplier inventories

A Four-Year High in One Line

American private-sector output expanded in August at its fastest rate in more than four years, according to S&P Global's flash purchasing managers' survey, with the composite output index rising to 56.0 from 54.5 in July.

That is the highest reading since April 2022, and it is a large monthly move for a series that usually shifts by a few tenths. Bloomberg reported the result under the description of the fastest pace since 2022, and it lands at a moment when the consensus expectation had been for the economy to be slowing rather than accelerating.

Flash estimates are based on a substantial majority of the final survey responses and are revised when the complete data arrive, but the direction of the August reading is unusually clear-cut.

Services Carried It

The expansion was concentrated in services, where the business activity index jumped to 56.8 from 54.6, a 20-month high on S&P Global's measure.

Services account for the large majority of American output and employment, so a two-point move in that index dominates the composite arithmetic. The survey attributed the improvement to a robust increase in new business, indicating that the growth reflected incoming demand rather than firms working through an existing backlog.

Backlogs in fact grew. S&P Global reported that outstanding orders accumulated at the fastest rate since May 2022, which is the pattern seen when demand is arriving faster than capacity can absorb it.

Hiring Restarts After Eight Flat Months

The most consequential detail sits in the employment component. S&P Global reported that private-sector employment rose sharply in August after showing little net change over the previous eight months, and that the increase was the largest since January 2025.

Eight months of flat headcount followed by a sharp rise is a distinctive sequence. It suggests firms that had been meeting demand by extending hours and running down slack concluded in August that the improvement was durable enough to justify recruitment.

Survey employment measures lead official payroll data, and they capture intent as much as completed hiring. Whether the August signal survives contact with the Bureau of Labor Statistics establishment survey is the first thing that will test the strength of this reading.

Manufacturing Goes the Other Way

Factories did not share the improvement. The headline manufacturing PMI fell to 53.2 in August from 53.9 in July, its weakest reading in five months, according to S&P Global.

The survey identified a specific cause: safety-stock building, which had powered goods production in the early months of the Iran war, is now fading. Manufacturers who spent the spring accumulating inventory against supply disruption have largely finished doing so, and the production that activity supported is unwinding with it.

A reading of 53.2 still indicates expansion, since 50 is the dividing line. What has changed is the composition of growth, which has shifted decisively from goods to services over the course of the summer.

Supply Chains Are Still Tight

Against the improving demand picture sits a deteriorating supply one. Bloomberg reported that supplier delivery delays lengthened again in August, to one of the greatest extents in four years.

S&P Global attributed the lengthening to three causes acting together: shipping disruption, tariffs, and thin inventories held at suppliers. The last of those is the consequence of the same destocking that is dragging on manufacturing output, which means the two findings are connected rather than contradictory.

Extended lead times are ordinarily a precursor of price pressure, because scarcity gives suppliers pricing power. That makes the inflation reading in this survey more surprising than the growth reading.

Costs Ease Despite the Bottlenecks

Input costs rose in August at the slowest pace since the beginning of the Iran war, S&P Global reported, which is a notable divergence from the delivery-times data in the same survey.

Two explanations fit. The first is that energy and commodity inputs have stabilised sufficiently to offset the cost of longer lead times. The second is that firms facing strong demand are more willing to absorb input increases in margin rather than pass them straight through, which shows up as weaker reported cost inflation at the point of sale.

For monetary policy the combination is the favourable one: accelerating output and employment alongside decelerating input costs is the configuration that permits growth without forcing a policy response.

The qualification is that flash surveys measure the rate of change reported by purchasing managers, not the level of activity, and they do not distinguish between a firm charging more and a firm selling more. A single month's reading, however strong, carries that limitation with it.

What the Survey Implies for Third-Quarter GDP

S&P Global's own read-across is that the third-quarter survey data point to annualised growth approaching 3.0%, up solidly from the 1.5% pace recorded in the second quarter. That would represent a doubling of the growth rate within a single quarter.

Three things will test it. The official third-quarter GDP estimate is the arbiter, but before that the August payrolls report will show whether the survey's hiring signal is real, and the September flash PMI will show whether services momentum was a single month or a trend.

The manufacturing series is the one to watch for a turn. If destocking continues to drag on factory output while services cool from an unusually strong August, the composite could give back much of this month's gain without anything fundamental having changed.

Sources

• S&P Global - Flash US PMI, August 2026
• Bloomberg - US Business Activity Grows at Fastest Pace Since 2022 on Strong Demand
• Benzinga - S&P Global Flash US PMI August 2026: composite hits 52-month high
• Yahoo Finance - US Business Activity Expands at the Fastest Pace Since 2022