A strong PMI release may have just aided Fed Chair Jerome Powell. The S&P Global US Composite PMI rose to 55.4 in August 2025, up from 55.1 in July, showing growth for the 31st straight month, according to flash estimates.
This was also the fastest growth seen this year. The services sector continued to grow strongly, though activity slightly slowed from July’s peak (55.4 vs 55.7). Meanwhile, manufacturing bounced back, with the PMI rising to 53.3 from 49.8 in July, its highest level since May 2022.
Hiring picked up, with job creation hitting one of the fastest rates in three years. Businesses also reported the biggest backlog of unfinished work since May 2022.
Now all of this sounds like a solid economy and looking at the data more closely we see a few other interesting points.
S&P Global’s Chris Williamson noted the survey also showed mounting inflation pressures. Businesses are increasingly passing tariff-related costs through to consumers, and the PMI price indices are now running at their highest levels in three years. Selling prices for goods and services have moved higher, suggesting that consumer inflation will “rise further above the Fed’s 2% target in the coming months.
The PMI results create more uncertainty for the Fed. Instead of supporting the idea of immediate rate cuts, the data suggest the economy is closer to conditions that typically lead to rate hikes.
“With increased business activity, hiring, and rising prices shown in the survey, the PMI data lean more toward rate hikes than cuts,” Williamson explained.
The move did lead to an immediate bounce for the US Dollar Index which has since continued its advance. However as has been the case with Gold of late, the precious metal saw an immediate drop but has since recovered to a near daily high at $3345/oz.
This highlights the indecision in Gold at the moment with market participants likely keeping an eye on the Jackson Hole Symposium and Fed Chair Powell.