Increased business activity in July may not last

In July, U.S. business activity accelerated to its fastest pace since November, supported partly by spending tied to the FIFA World Cup and Independence Day celebrations. At the same time, manufacturing growth slowed to its weakest level since March as precautionary inventory building eased. S&P Global’s data also linked increased oil prices and renewed supply chain disruptions—connected to renewed tensions involving Iran—to higher inflation and economic risks. S&P Global reported its flash services Purchasing Managers’ Index rose to 53.6, from 51.2 in June, while the Composite Output Index climbed to 53.6, an eight-month high. S&P Global said the U.S. economy remains on track for about 2% GDP growth in the third quarter, despite headwinds, with government’s first estimate of second-quarter GDP due next week. Economists polled by Reuters expected 2.0% growth, roughly in line with Q1’s 2.1%.