Stock market today: Dow, S&P 500, Nasdaq retreat after jobless data, Walmart earnings miss

US economic output hit an eight month high during August while activity in the manufacturing sector reached the highest level in more than three years.

S&P Global’s flash US composite PMI, which captures activity in both the services and manufacturing sectors, came in at 55.4 in August, up from 55.1 in July.

Increased activity in the manufacturing sector drove the gains, with the manufacturing PMI index hitting a reading of 53.3, its highest level in 39 months. Meanwhile, the services PMI declined to 55.4 in August, down slightly from 55.7 and marking a two-month low for the index.

“A strong flash PMI reading for August adds to signs that US businesses have enjoyed a strong third quarter so far,” S&P Global Market Intelligence chief business economist Chris Williamson said in the release. “The data are consistent with the economy expanding at a 2.5% annualized rate, up from the average 1.3% expansion seen over the first two quarters of the year.”

The release didn’t come without hiccups, though. Both the services and manufacturing sectors saw their second largest monthly input price increase since January 2023.

“The resulting rise in selling prices for goods and services suggests that consumer price inflation will rise further above the Fed’s 2% target in the coming months,” Williamson said.