US business activity grew at its quickest pace in eight months in July, helped mainly by solid domestic demand for services. The latest survey reading pointed to stronger momentum in the service sector, even as manufacturing lost some speed.
Services businesses were the main driver of the improvement, reaching their strongest activity level since November 2025. That strength helped balance weaker factory performance, suggesting that consumer and domestic business demand remained firm enough to support broader growth.
At the same time, the report showed growing pressure on supply chains and business costs. Longer delivery times and higher input prices signaled that companies are still dealing with operational strains, even as overall activity improves.
The mixed picture leaves the US economy with both support and risks. Stronger services activity is boosting headline business growth, but softer manufacturing conditions, supply delays and rising costs could weigh on companies if those pressures continue.
