US service-sector growth unexpectedly slows in December
The US services sector continued to grow in December but at a much slower pace, Markit revealed on Thursday.
The US services purchasing managers’ index (PMI) reading came in at 53.6 this month, a decrease from 56.2 the month before.
Readings above 50 indicate expansion while those below that mark suggest a contraction. Analysts had expected growth to pick up slightly to 56.3.
The reading was the weakest since the weather-related slowdown in February, and was driven by weaker new business gains and lower pressures on operating capacity.
The data revealed input price inflation slowed in December and job creation moderated to eight-month low.
Also on Thursday, Markit released the US composite PMI, which tracks both the services and manufacturing sector.
This also grew at a slower pace this month at 53.8 when compared with 56.1 in November. This was due to a softer private sector output growth.
Chief economist from Markit, Chris Williamson, said: “The slowdown is linked to weaker growth of new business as customers becoming increasingly worried about the economic outlook both at home and abroad, with the prospect of higher interest rates cooling demand alongside side rising global geopolitical concerns.”