U.S. Services Index Falls to Four-Month Low as Orders ModerateBy
America's service industries expanded in
December at the weakest pace in four months as orders cooled at
companies that make up the bulk of the economy, a survey from
the Institute for Supply Management showed Friday.
Highlights of ISM Non-Manufacturing (December)
- Non-manufacturing index fell to 55.9 (est. 57.6) from 57.4; readings above 50 indicate growth
- New orders gauge dropped to 54.3, the lowest since August 2016, from 58.7
- Employment measure advanced to 56.3 from 55.3
The unexpected slowdown in services, which represent almost 90
percent of the economy, is at odds with ISM manufacturing data
this week showing factory managers the most upbeat in three
months on stronger orders and output.
The decline in the gauge of service providers such as retailers
and builders indicates growth is settling back to a more
sustainable, yet still solid, pace. Last year, the ISM's
services measure last year averaged 57, the second-strongest
A gauge of inventory sentiment within the various non-
manufacturing industries climbed to a five-month high in
December, indicating more view their stockpiles as too high.
That may help explain why order growth slowed.
- Business activity gauge, which parallels the ISM's factory production index, fell to 57.3 from November's 61.4
- Order backlogs measure eased to 50 from 51.5
- Prices-paid index was little changed at 60.8 after 60.7
- Measure of inventory sentiment jumped to 62.5 from 56
— With assistance by Alexandre Tanzi