US private sector activity accelerated sharply in July, with the S&P Global composite Purchasing Managers’ Index (PMI) rising to 53.6 from 51.9 in June, according to preliminary data released Thursday.
The reading marks the strongest expansion in business activity in months, driven by broad-based gains across both manufacturing and services sectors.
The jump to 53.6 signals a notable pickup in momentum, moving well above the 50.0 threshold that separates expansion from contraction.
While the June figure already indicated growth, the July acceleration suggests that demand pressures are intensifying rather than cooling, a development that could influence Federal Reserve policy expectations.
Markets are likely to interpret the stronger-than-expected growth data as a sign that the US economy remains resilient despite higher interest rates.
This resilience reduces the urgency for the Federal Reserve to cut rates aggressively, potentially pushing back expectations for easing in the near term.