US Business Activity Accelerates on Services Growth Amid Manufacturing Decline

In July 2025, U.S. business activity accelerated to its fastest pace since last December, driven primarily by robust growth in the services sector, with the S&P Global Composite PMI rising to 54.6. The services PMI surged to 55.2, reflecting the sharpest expansion in private services activity this year, supported by strong domestic demand and increased employment. However, manufacturing activity contracted for the first time in months, with its PMI falling to 49.5, pressured by rising input costs attributed largely to tariffs and weaker demand. Inflationary pressures intensified as businesses raised prices, with costs for goods and services increasing at rates among the highest in three years. Despite strong services growth, companies expressed concerns about the impact of tariffs, federal spending cuts, and the overall economic outlook for the year ahead. This dynamic suggests more job opportunities in services but potential price increases for goods due to manufacturing challenges.