Business activity within US service sector continue to expand this month
Date
8/25/2024 4:53:42 AM
(MENAFN) According to a report released on Thursday by S&P Global, business activity within the US service sector continued to expand robustly in August. The report highlighted that the sector experienced solid growth, with the S&P Global US Services PMI Business Activity Index registering a value of 55.2 for August. This figure surpassed market expectations, which had anticipated a reading of 54.0, and showed a slight increase from July’s reading of 55.0. A PMI reading above 50 indicates expansion, while a reading below 50 signifies contraction.
Chris Williamson, the chief business economist at S&P Global Market Intelligence, commented that the strong growth observed in August suggests a robust GDP growth rate exceeding 2 percent annualized for the third quarter. This performance is expected to alleviate some concerns about a potential near-term recession. Williamson noted that the service sector's expansion has become a key driver of economic growth, particularly as manufacturing—which often leads the economic cycle—has entered a period of decline.
Despite the positive growth, Williamson pointed out that the service sector's expansion is being somewhat constrained by persistent hiring difficulties. These challenges continue to push up wage rates, contributing to elevated levels of overall input cost inflation relative to historical standards. As a result, while the service sector remains a bright spot in the economy, it faces ongoing pressures related to labor costs and inflation.
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