Well, good news and bad news from the preliminary read on services and manufacturing activity across the world’s largest economy in early August.

The good news is, both gauges from S&P Global topped estimates, suggesting growth’s running at a respectable 2.5% rate so far in Q3.

The flash read on the services headline, 55.4, beat consensus, which expected a downtick. The big surprise came on the manufacturing side, where activity jumped back above the 50 demarcation line separating expansion from contraction. At 53.3, that metric’s the best since mid-2022.

In the color accompanying the release, S&P Global’s Chris Williamson described strong demand and concerns about prospective supply shortages.

Backlogs, he said, are rising “at a pace not seen since the pandemic-related capacity constraints,” while panelists reported stockpiling finished goods at the fastest pace in survey history “linked in part to worries over future supply conditions.”

Of course, the flipside of this — the bad news mentioned here at the outset — is price pressures. Williamson didn’t skirt the issue. Far from it. His assessment was brutal.

“Companies have passed tariff-related cost increases through to customers in increasing numbers, indicating that inflation pressures are now at their highest for three years,” he wrote. When considered in conjunction with accelerating business activity and stronger hiring, “the rise in prices signaled by the survey puts the PMI data more into rate hiking, rather than cutting, territory,” Williamson added.

It’s a good thing Williamson doesn’t work for the US government, otherwise he might be out of a job for venturing such a heretical notion. I hope ol’ Chris was scrupulous when he filled out any applications for second homes he might own.