US business activity cools slightly in October

23rd Oct 2026 15:05

(Sharecast News) - US business activity cooled slightly in October, but both the manufacturing and services PMIs continued to signal some of the strongest growth seen in the past five years, even as selling‑price inflation accelerated to its fastest pace since August 2022.

S&P Global's flash manufacturing PMI edged up to 56.0 from 55.9, a 53‑month high, while the manufacturing output index dipped to 55.8. In services, the business activity index eased to 57.9 from 58.8, and the composite output PMI slipped to 57.6 from 58.4, still pointing to the second‑strongest expansion since early 2022.

S&P Global said order books strengthened further, with new business rising at the fastest rate in more than four years, with domestic demand remaining the main driver, though October also saw the strongest rise in export sales since May 2022, including the first increase in goods exports since mid‑2025.

Backlogs rose sharply again, prompting firms to hire at one of the quickest rates in over four years, with manufacturing payrolls increasing at the fastest pace since 2012, while services hiring remained robust despite easing from September's surge.

Business expectations softened slightly but stayed near this year's highs, with manufacturers more upbeat than service providers. However, S&P Global noted that cost‑of‑living pressures, borrowing costs and political uncertainty continued to weigh on sentiment in the services economy.

Price pressures intensified, with selling‑price inflation across goods and services hitting its strongest level since August 2022. Input costs rose sharply, driven by higher energy, fuel and freight rates, as well as rising prices for steel, aluminium and copper. Supplier delivery times lengthened to the greatest extent since 2022 amid material shortages, low inventories and shipping delays.

Reporting by Iain Gilbert at Sharecast.com