US Private Sector Expands Less Than Previously Thought

The US Composite PMI fell to 55.9 in October 2026 from 58.4 in September, its lowest reading in three months and below the preliminary estimate of 57.6, as both manufacturing output and services activity recorded weaker gains. Nevertheless, new business continued to increase sharply, supported primarily by strong demand in the services sector, while overall employment growth remained positive. Cost pressures also stayed elevated, despite easing somewhat from September, and businesses raised selling prices at the fastest pace since August 2022, suggesting that inflationary pressures remain a concern. Meanwhile, confidence in the business outlook weakened, falling to its lowest level since May. Overall, the survey points to continued economic expansion, but slower momentum, persistent pricing pressures and deteriorating business confidence indicate growing challenges for the private sector.

The US Composite PMI eased to 57.6 in October 2026 from 58.4 in September, a two-month low, but remained firmly in expansion territory and signalled the second-strongest increase in business activity since March 2022. Growth in new orders strengthened to its highest level in more than four-and-a-half years, while export sales recorded their largest gain since May 2022. Employment also remained strong, rising at its fastest pace since June 2022 as companies increased staffing to meet demand and address growing backlogs. However, mounting cost pressures drove selling-price inflation to its highest level since August 2022. Input costs rose at their fastest pace since November 2022, excluding September’s increase. Meanwhile, business confidence for the year ahead weakened slightly but remained the second-highest reading recorded this year.

The S&P Global US Composite PMI rose to 58.4 in September 2026 from 56 in August, matching the flash estimate and marking the strongest expansion in private-sector business activity in more than five years. Growth accelerated across both manufacturing and services, pointing to broad-based strength in the US economy. The increase in output was supported by a rapid rise in new orders, indicating that demand remained robust during the month. Stronger workloads also encouraged businesses to expand their workforces, with employment increasing at the fastest pace since June 2022. However, the stronger economic performance was accompanied by a renewed build-up in cost pressures. Input prices rose at their sharpest rate since October 2022, adding to concerns about inflationary pressures across the private sector. Companies responded by raising their selling prices at a faster pace in September, suggesting that higher input costs were increasingly being passed on to customers.