The latest PMI reports offer a window into the health of the U.S. economy, particularly for its service and manufacturing sectors. While August saw strong growth in both areas, concerns remain regarding inflation and future economic prospects. Analysts point to increased orders during summer driving hiring across both service and manufacturing sectors, leading to a projected annual growth rate of 2.4% for Q3. However, persistent inflation, fueled by tariffs on goods and services, casts a shadow over the outlook. Further adding to these concerns is the impact on business optimism, currently at a three-year low due to uncertainty surrounding future economic conditions. The Federal Reserve’s approach to interest rate adjustments remains uncertain as they weigh the risks of potential growth against disappointing job data.