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U.S. Economic Recovery Gains Steam While Others Stutter

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The U.S. economy picked up momentum this month as firms shook off the effects of the pandemic-induced downturn, though recoveries in other parts of the world slowed, according to new surveys of purchasing managers.

The data released Friday suggest U.S. firms are seeing demand return as they reopen from the lockdowns imposed in the spring and early summer. They also indicate the economy has so far managed to weather July’s sharp rise in new coronavirus infections and business closures that threatened to knock the recovery off course.

Data firm IHS Markit said its composite purchasing managers index, a measure of manufacturing and services activity, rose to 54.7 from 50.3 in July, an 18-month high, with both sectors seeing a big rise. A reading above 50 is a sign of expansion while a reading below 50 is a sign of contraction.

The index of manufacturing output was up to 53.6 from 50.9 in July. The services activity index rose to 54.8 from 50.

“The renewed increase in sales among service sector firms was welcome news following five months of declines,” said Siân Jones, economist at IHS Markit. “Encouragingly, firms signaled an accelerated rise in hiring, as greater new business inflows led to increased pressure on capacity.”

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