U.S.: Businesses Grow at Fastest Pace in 4 Years

WHAT HAPPENED

Business activity in the U.S. rose to 56 points in August, up from 54.5 in July, its best level in over four years. Services accelerated; factories cooled slightly.

WHY IT MATTERS

Restaurants, hotels, travel, banks, and stores are growing and hiring more, which supports employment and consumption. Factories are producing less. If the pace continues, the economy could grow close to 3% in the quarter, compared to 1.5% before. Additionally, companies are raising prices less.

AND FOR YOUR PORTFOLIO

For consumers, the signal combines more activity and employment with less pressure on prices. In a long-term investment, a stronger economy can help the revenues of many companies, although the progress is not uniform: services are better, factories are weaker.