US Services Activity Unexpectedly Improves: S&P Global

The S&P Global US Services PMI rose to 56.8 in August of 2026 from 54.6 in the previous month, well above market expectations of a drop to 54, to reflect the sharpest expansion in services activity since December 2024. New business wins expanded sharply in the sector, fast enough to expand backlogs for firms as clients made up for the decline in orders after the outbreak of war in the Middle East dampened demand in the second quarter of the year. Consistently, staffing levels were firmly higher. Meanwhile, input costs continued to rise at a marked pace, although inflation eased a bit from the 14-month high in July. Despite this, average output charge inflation softened to a six-month low. Looking ahead, confidence improved for a third month.

The S&P Global US Services PMI rose to 54.6 in July from 51.2 in the previous month, revised higher from the flash estimate of 53.6 to mark the sharpest expansion in activity in nine months. New business levels rose the most since November, with panelists noting a pickup in activity due to FIFA World Cup and Independence Day spending, and higher investments in sales, marketing, and product development. New work was awarded from domestic clients, as export orders fell the most since 2022 amid tariffs and the Middle East war. Consequently, firms increased their staff counts the most in eight months. Meanwhile, input cost inflation rose to a 14-month high due to tariffs and higher raw-material costs, driving companies to pass on price hikes to consumer charges when possible. Looking ahead, confidence improved on hopes of easing energy prices and business expansion plans.

The S&P Global US Services PMI rose to 53.6 in July of 2026 from 51.2 in the previous month, marking the fastest expansion in services sector activity so far this year, according to a flash estimate. Output was supported by a larger intake of new work for companies, with companies noting a pickup in activity due to FIFA World Cup spending and higher investments in sales, marketing, and product development. Still, the impact of the war in Iran, mainly though higher energy prices that lifted operating cars and squeezed consumers' purchasing power, continued to impact activity levels. Therefore, employment growth was only marginal. Input prices for the sector grew to a 14-month high, and output inflation surged to its highest in nearly four years. Despite inflationary risks, the sentiment gauge rose to a one-year high.