ISTANBUL 

Business activity in the US service sector continued expanding in August, according to a report by financial services company S&P Global.

"US business activity growth remained robust in August," said the report released Thursday, adding that the service sector expanded at a solid and increased rate.

The S&P Global US Services PMI Business Activity Index came in at 55.2 in August, above the market expectation of 54.0, following the July reading of 55.0. A reading above 50 indicates expansion and below 50 shows contraction.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said the solid growth pace in August points to robust GDP growth in excess of 2% annualized in the third quarter, which should help alleviate near-term recession fears.

"Growth has become increasingly dependent on the service sector as manufacturing, which often leads the economic cycle, has fallen into decline," he added.

Williamson, however, noted that service sector growth is constrained by hiring difficulties, "which continue to push up pay rates and means overall input cost inflation remains elevated by historical standards."