The latest report by IHS Markit revealed on Wednesday the seasonally adjusted final IHS Markit U.S. Services Business Activity Index (PMI) stood at 50.0 in July, up significantly from 47.9 in June and higher than the “flash” figure of 49.6. This was the highest reading since January and signaled a stabilization in business activity across the U.S. service sector as businesses continued to reopen following coronavirus lockdowns in prior months.

Economists had forecast the index to stay unrevised at 49.6.

According to the report, new orders declined at a slightly quicker rate as domestic and foreign client demand remained muted, but employment increased for the first time since February and output expectations improved to the strongest since March 2019 amid hopes of an end to lockdown measures over the longer term. On the price front, input costs and output charges rose at sharper rates as there were some reports of PPE-related costs rising, and supplier price hikes were partially passed on to customers.