US S&P Composite PMI flash rises to 53.6, beating forecasts and hitting an 8-month high

The US economy just printed a number that nobody on Wall Street was fully prepared for. The S&P Global Flash Composite PMI for July 2026 came in at 53.6, well above the forecast of 52.2 and meaningfully higher than June’s reading of 51.9, marking the strongest composite reading in eight months. A PMI above 50 signals expansion. The further above 50 you go, the faster things are growing. What is actually driving this number The services sector did the heavy lifting. The Services Business Activity Index hit 53.6 in July, up sharply from 51.2 in June. Manufacturing told a more complicated story. The Manufacturing PMI held steady at 53.8, barely changed from June’s 53.9. But the Manufacturing Output Index fell to 53.6 from 56.2 in June, a four-month low. Employment ticked up marginally for the first time in three months, and business confidence climbed to an eight-month high. S&P Global’s Chief Business Economist Chris Williamson framed the data directly: this PMI reading is consistent with annualized GDP growth of approximately 2.0% for the third quarter, a pickup from a softer second quarter. The inflation problem hiding inside the good news Input cost inflation hit a 14-mont...