Services-Sector Growth May Have Slowed in December

Services-Sector Growth May Have Slowed in December

The Institute for Supply Management’s composite services index fell to 62.0 percent in December, falling 7.1 points from 69.1 percent in the prior month. The index remains above neutral and suggests the 19th consecutive month of expansion for the services sector and the broader economy (see top of first chart). However, the decline in the latest month suggests that growth may have been somewhat less robust. Compared to the manufacturing sector, the decline was more severe though the level of the index remains above the manufacturing-sector index (see top of first chart).

Among the key components of the services index, the services new-orders index fell to 61.5 percent from 69.7 percent in November, a drop of 8.2 percentage points from November (see bottom of first chart). New orders have been above 50 percent for 19 months and above…

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