This year may have brought a bitter recession, but there are still plenty of positive developments. After the S&P 500 recently hit a new all-time high, overall business activity from services and manufacturing operations in the United States is showing some pre-coronavirus strength.
IHS Markit reported that its flash U.S. Composite PMI Index rose to 54.7 in August from 50.3 in July. This marked the strongest reading in 18 months.
Index readings above 50 generally indicate growth from the private sector, while readings under 50 indicate economic contraction.
The new orders index rose to 54.0 in August from July’s final reading of 49.7.
One interesting aspect that coincides with a weak dollar is that the flash reading showed foreign sales rose at the fastest pace in almost six years.
Friday’s report was welcome as it is somewhat “live data” at a time when coronavirus cases in the United States are still rising and have crossed the 5.5 million case threshold, right into the back-to-school period and with certain high population centers still facing limited openings.
Strong client demand was cited in the IHS Markit report. The group said: “Total new business rose for the first time since February and at a solid rate. Manufacturing firms registered a steeper expansion in new order inflows than in July, while service providers signaled a renewed increase in sales.”
Most economic data remains choppy, and the end result of a full recovery remains somewhat elusive.