Citing faster deliveries, the Institute for Supply Management released a report on Wednesday showing an unexpected slowdown in the pace of growth in U.S. service sector activity in the month of December.
The ISM said its non-manufacturing index edged down to 55.3 in December from 55.9 in November, although a reading above 50 continues to point to growth in the service sector.
The modest decrease came as a surprise to economists, who had expected the non-manufacturing index to inch up to 56.2.
Anthony Nieves, chair of the ISM Non-Manufacturing Business Survey Committee, said, “Faster deliveries in December contributed to the overall slight slowing in the rate of growth according to the NMI composite index.”
“All of the other component indexes increased in the month of December,” he added. “The majority of respondents’ comments remain positive about business conditions and the overall economy.”
The report said the supplier deliveries index slumped to 48.5 in December from 53.0 in November, with a reading below 50 indicating faster deliveries.
On the other hand, the new orders index rose to 58.2 in December from 57.5 in November, and the business activity index ticked up to 58.7 from 58.5.
The employment index also climbed to 55.7 in December from 55.0 in November, indicating the 22nd consecutive month of job growth in the service sector.
Meanwhile, the report pointed to a modest downturn in prices, as the prices index slipped to 49.7 in December from 50.3 in November.
The ISM released a separate report on Monday showing that U.S. manufacturing activity contracted for the second consecutive month in December.
The institute said its index of activity in the manufacturing sector edged down to 48.2 in December from 48.6 in November, while economists had expected the index to inch up to a reading of 49.2.
With the unexpected decrease, the manufacturing index dropped to its lowest level since hitting 45.8 in June of 2009.
The material has been provided by InstaForex Company – www.instaforex.com