The US economy just shifted into a higher gear. The S&P Global Flash PMIs for September didn’t just beat expectations — they blew the doors off, with both manufacturing and services posting their strongest readings in over four years. Business activity is now expanding at a pace not seen since the post-pandemic reopening boom of mid-2021.
The Numbers
Every major index surged past consensus in September, according to the S&P Global flash release (data collected September 10-22):
Composite PMI: 58.4 (up from 56.0, consensus ~56.0) — 62-month high
Services PMI: 58.7 (up from 56.5, consensus 55.7) — 59-month high, fastest services growth in nearly five years
Manufacturing PMI: 57.0 (up from 53.9, consensus 53.5) — 52-month high, strongest factory readings since May 2022
Manufacturing Output Index: 56.7 (up from 53.1) — 53-month high, production growth reviving after three months of deceleration
Source: S&P Global Flash US PMI press release, September 23, 2026. Consensus estimates from MarketWatch economic calendar.
The Growth Engine Is Firing on All Cylinders
This is the fourth straight month of accelerating growth. New orders surged in both sectors — hitting the fastest pace since March 2022 in services and April 2022 in manufacturing. Employment rose sharply too, with job gains at a rate not seen since June 2022 and rarely exceeded since the survey began in 2009.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, didn’t mince words:
“US business continues to boom, with output growing at the fastest rate for over five years in September. Historical comparisons suggest that the latest survey data point to annualized growth of around 5% with a 4% gain now signalled for the third quarter as a whole.”
For context: Q2 GDP came in at 2.1% (the third estimate drops September 30). A 4% Q3 signal represents a near-doubling of the growth rate.
The Inflation Catch
But the press release carries a warning label. Input costs surged at the steepest rate since October 2022, driven by the recent spike in oil prices that pushed fuel and transport costs sharply higher. Supply chain delays intensified to their worst level since July 2022. Backlogs of uncompleted orders rose at the sharpest rate since May 2022.
Translation: the economy is running hot enough that capacity can’t keep up. When demand outstrips supply, prices rise. That’s Economics 101, and it’s exactly what the Fed doesn’t want to see right now.
Selling price inflation also picked up in September, though competition tempered the pass-through in some sectors, particularly services. Still, the direction is clear — and it’s not toward the Fed’s 2% target.
Complicating the Fed’s Calculus
Last week, the Fed raised rates for the first time since 2023 — a 25-basis-point move that sent the Dow down 600 points on the day. But markets quickly shrugged it off, and the Nasdaq hit a record high by Monday.
Today’s PMIs make that market optimism look less like denial and more like recognition that the economy genuinely has momentum. But they also argue against the idea that the Fed is done. If growth is running at a 5% annualized clip and input costs are spiking, the case for another hike gets stronger — not weaker.
The next FOMC decision comes November 5. Between now and then: the September jobs report (October 2), CPI (October 13), PPI (October 14), retail sales (October 15), and the first estimate of Q3 GDP (October 28). Each of those will either validate today’s PMI signal or complicate it.
Bottom Line
September’s flash PMIs paint a picture of an economy that isn’t just resilient — it’s accelerating. Manufacturing is back. Services are booming. Jobs are being added at a pace that would have been unthinkable a year ago. But the flip side of all that momentum is building price pressure, and the Fed just showed it’s willing to hike into strength. For investors, the question isn’t whether the economy can handle higher rates — it clearly can. The question is whether the Fed thinks it needs to push harder.
