US business activity slowed modestly in October, though robust demand allowed companies to raise prices for goods and services — a sign that inflation could increase further and remain persistently high in the coming months, Reuters reported on October 23, citing S&P Global's flash survey.
S&P Global said its flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, slipped to 57.6 this month from a five-year high reading of 58.4 in September. A reading above 50 indicates expansion in the private sector. Strength in manufacturing was offset by a slight pullback in the vast services sector, Reuters said. The September baseline — composite 58.4, with manufacturing at 55.9 and services at 58.8 — was also the starting point in FXStreet's preview of the release.
Source: FXStreet — US S&P Global PMI expected to signal slower business activity in October, Oct. 23, 2026
Factories hiring, supply chains tightening
The survey's measure of new orders received by businesses edged up to 58.2 this month, the highest level since March 2022, from 58.1 in September, mostly on services demand, with S&P Global noting rising domestic demand, precautionary stock building and growth in exports. Though overall employment dipped after surging in September, manufacturers boosted headcount: a measure of factory employment increased to the highest level since March 2012, with firms seeking to boost capacity to fulfil stronger customer demand, Reuters reported.
The price signals pointed the other way. The gauge of prices charged for output rose to 59.8, the highest since August 2022, as businesses across manufacturing and services raised prices, while the measure of prices paid for inputs stayed high at 64.9. Suppliers' delivery times to manufacturers deteriorated further, dropping to a more than four-year low of 38.1 from 40.9. 'Cost pressures remain a key concern,' said Chris Williamson, chief business economist at S&P Global Market Intelligence. 'Supply chain bottlenecks have meanwhile intensified, and order book backlogs are growing, making it easier for companies to pass higher costs on to customers.'
The PMI suggested the economy started the fourth quarter on solid footing after what is expected to have been a strong July-September quarter; economists expect next week's advance GDP report to show growth of around a 3.0 per cent annualized rate, driven by consumer spending and business investment in AI. The Federal Reserve raised its benchmark rate by 25 basis points in September to a 3.75%-4.00% range, and economists expect the central bank to stand pat at its meeting next week and hike again in December, Reuters reported.
The flash PMI is one of the earliest reads on the US economy each month. For Punjabi families in the US — in trucking, warehouses, gas stations, restaurants and small manufacturing — the mix matters: factories are hiring and order books are full, but the fastest rise in prices charged since 2022 means the cost squeeze at the pump, the grocery store and the parts counter is not easing yet.
What is solid
- S&P Global's flash Composite PMI was 57.6 in October, down from 58.4 in September, with new orders at 58.2 and output prices at 59.8 — reported by Reuters on October 23; FXStreet's preview confirms the September baselines of 58.4 composite, 55.9 manufacturing and 58.8 services.
- Factory employment in the survey rose to its highest since March 2012, and suppliers' delivery times fell to 38.1, a more than four-year low (Reuters, citing S&P Global).
What is only claimed
- Whether the price rises in the survey will push overall US inflation higher in the coming months is an inference Reuters draws from the data — it is not yet an official inflation reading.
- Next week's advance GDP estimate of around 3.0 per cent annualized growth for the third quarter is an economists' expectation reported by Reuters, not a published figure.