U.S. Business Activity Hits Five-Year High as Price Pressures Mount

U.S. business activity grew at its fastest pace in more than five years in September, S&P Global reported Wednesday, with the PMI Composite Output Index rising to 58.4 from 56 in August. Manufacturing output accelerated at the quickest rate since April 2022, and hiring reached its fastest pace since June 2022. Input costs climbed to their highest level since October 2022, driven by energy prices, tariffs, and supply chain delays. Backlogs of work rose sharply, indicating companies are gaining pricing power — a concern for the inflation outlook. The data follows the Fed's September 16 rate hike to a range of 3.75%–4%, its first tightening in three years. Atlanta Fed survey data showed businesses expect 12-month inflation of 2.4%, up from 2.2% in August. Richmond Fed President Tom Barkin called inflation "our troublemaker." The OECD forecast U.S. GDP growth of 2.2% this year.