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24.08.202608:58 Forex Analysis & Reviews: 3% Annual Growth Instead of 1.5%: American Business Experiences Its Best Quarter in Four Years

Relevance up to 02:00 2026-08-25 UTC--4

The dollar made a strong recovery last Friday after the U.S. composite output index soared to 56.0 in August, up from 54.5 in July. The services activity jumped to 56.8 from 54.6, reaching the highest level in 20 months. Meanwhile, the industrial sector saw a noticeable decline: the manufacturing index fell to 51.9 from 53.9, hitting a 13-month low, and the production PMI dropped to 53.2 from 53.9, marking the weakest result in five months.

Exchange Rates 24.08.2026 analysis

S&P Global vividly described the situation: "American business is experiencing a boom, with companies reporting the fastest output growth in more than four years in the third quarter, as expansion gained additional momentum in August. Q3 survey data now points to annual growth rates approaching 3.0 percent, significantly higher than the 1.5 percent observed in the second quarter."

The most significant for the markets was the employment block. After eight months of nearly flat dynamics, employment numbers surged in August, marking the largest increase since January 2025 and the second-largest in the last four years. Hiring in the services sector notably reached a peak not seen since early last year, while job growth in the industrial sector accelerated to its highest level since May. This is attributed to employers gaining confidence as concerns over the negative impacts of tariffs and the Middle Eastern conflict ease.

It is worth noting that these data stand in sharp contrast to official reports. Recall that the July report from the Bureau of Labor Statistics showed a reduction in employment by 23,000 instead of the expected increase, while the figures for May and June were revised down by a total of 103,000. The S&P Global survey, on the other hand, documents one of the strongest staffing increases in four years. This contradiction between hard data and surveys makes the upcoming August employment report particularly significant for the Federal Reserve.

Price pressures eased notably in August, which is good news for regulators. The key reason was the reduction in reports of the need to pass on the rising costs of fuel and energy to customers.

However, the Middle Eastern conflict remains a key concern for businesses, particularly given its impact on supply chains and energy prices. Supply delays in August reached one of the highest levels in the past four years, clearly limiting output at many companies, while price pressure, although easing, remains elevated and is likely to rise again if energy prices increase further.

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