U.S. Services Activity Grew Only Slightly in December -- ISM
January 05 2024 - 9:50AM
Dow Jones News
By Ed Frankl
The U.S. services sector grew at a slower pace than expected in
December as demand cooled and employment conditions slumped,
according to survey data released Friday.
The Institute for Supply Management's services-activity index
fell to 50.6 in December from 52.7 in November. Economists had
expected the index to dip less steeply to 52.5, according to a poll
compiled by The Wall Street Journal ahead of the release.
Despite the decline compared with November, a reading above the
no-change mark of 50 indicates expansion in the services sector,
which has grown for the last 12 months, and 42 of the past 43, the
ISM said.
"The services sector had a pullback in the rate of growth in
December, attributed to the decrease in the rate of growth for new
orders and contraction in employment," said Anthony Nieves, chair
of the Institute for Supply Management.
ISM's employment index sank to 43.3 from 50.7 in November, its
new orders index ticked down to 52.8 from 55.5 in the prior month,
though the ISM's business-activity index rose by 1.5 points on
month to 56.6. Half of 18 sub-industries ISM measures reported
growth in December, it added.
Among respondents, there were concerns related to economic
uncertainty, geopolitical events and labor constraints, Nieves
added.
"Revenues remain strong but labor is still constrained, and
suppliers are floating price increases beginning Jan. 1, which will
likely further reduce already low operating margins," said one
respondent to the survey from the healthcare and social assistance
sector.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
January 05, 2024 10:35 ET (15:35 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.