Business activity in the United States expanded to its highest level in eight months during July, according to S&P Global’s latest Purchasing Managers’ Index.

Growth was led by the services sector, supported by increased consumer spending and stronger demand for business services.

The report showed that new business orders improved while companies continued hiring additional workers to meet demand.

Manufacturing activity also remained in expansion territory, although growth slowed slightly compared with the previous month.

Economists said temporary factors, including spending related to major sporting events and seasonal travel, contributed to stronger economic activity.

However, they warned that rising energy prices and geopolitical tensions could slow momentum later in the year.

Businesses also reported higher operating costs because of increasing fuel prices and supply chain disruptions.

Many companies said they remain cautious about future investment decisions while monitoring inflation and global economic conditions.

Analysts expect future economic performance to depend on inflation trends, interest-rate decisions and developments in global energy markets.

Source: Reuters