(Bloomberg) -- US services activity picked up marginally early this month to the fastest pace in more than two years while the outlook improved on cooler price pressures and prospects for lower borrowing costs.

The S&P Global flash June business activity index for service providers edged up 0.3 point to 55.1, the highest since April 2022. Figures above 50 indicate expansion. The gauge topped all estimates in a Bloomberg survey of economists.

Combined with a second month of expansion among manufacturers, the S&P Global composite purchasing managers gauge also ticked up to a 26-month high.

“The upturn is broad-based, as rising demand continues to filter through the economy,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement.

“Although led by the service sector, reflecting strong domestic spending, the expansion is being supported by an ongoing recovery in manufacturing,” Williamson said.

The improvement stands in contrast to figures out of Europe. S&P Global’s composite purchasing managers index for the euro-area slid, indicating a loss of momentum as France’s snap election weighed on firms and manufacturing in the region recorded its worst month of the year.

In Japan, PMI numbers also pointed to weaker activity, with the services gauge registering a contraction for the first time in almost two years. UK figures also softened.

The US survey signals resilience in overall business activity as the second quarter drew to a close. Moreover, the report pointed to a further softening in price pressures that Federal Reserve policymakers need to see continue before reducing interest rates.

S&P Global’s composite measure of prices received eased to the second-lowest level since 2020. Growth in input costs also cooled. Nonetheless, the indexes are running higher than they were in the years leading up to the pandemic.

An index of future activity at US service providers rose nearly 2 points to 68.5, the second-highest level in a year. Respondents often indicated that the more upbeat outlook reflected easing inflationary pressures and expectations for lower borrowing costs.

However, prospects dimmed among manufacturers, many of whom expressed concerns about the outlook for demand and the impact of the upcoming elections on policy.

--With assistance from Kristy Scheuble.

(Adds graphic, euro-area figures)

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