The US service sector hit six months low after it dropped by more than expected in the month of December, according to the Institute for Supply Management non-manufacturing index.
The ISM services index hit 56.2 against the estimated 58.5 in December. The services index figure was recorded 59.3 in November.
The reading recorded in December indicates that the country’s non-manufacturing sector grew for the 59th straight month.
“The non-manufacturing part of the economy is doing fine,” senior economist Ryan Sweet, of Moody’s Analytics, said.
The ISM non-manufacturing index measures the economic growth in the US services sector. In the index, if a figure is above 50 then it indicates that the economic activity is expanding.
“The prices index read 49.5 in December from November’s 54.4. this indicates that the disinflationary pressures are intensifying due to the lower commodity prices,” Sweet said.
Meanwhile, several other aspects of the index also grew at a slower rate in the month of December. The business activity component of the index declined to 57.2 from the reading of November, i.e. 64.4, and the new orders index reported 58.9 in December, from 61.4 in November. The index’s employment aspect, which fell to 56 from November’s 56.7, signals weaker hiring in December.