NEW YORK – The vast U.S. services sector grew for an 11th straight month in December but at a slower pace, a private survey said on Monday, the latest in a series of data to underscore a modest economic recovery.
The Institute for Supply Management said its index of non-manufacturing business activity slipped to 54.7 in December 2002 after a strong surge to 57.4 in November. The December reading was slightly lower than forecasts for a drop to 55.9.
The services sector includes a large swathe of businesses from entertainment to banking, and makes up the vast majority of the U.S. economy. Any number on the ISM index above 50 denotes expansion; readings below 50 show contraction.
A more closely watched index on factories nationwide conducted by the same research group rocketed well above expectations in December, showing broad strength in nearly every sub-category. That fueled a powerful stock market rally on the first trading day of the New Year and sparked some optimism the ISM services index would show similar strength.
The non-manufacturing new orders index, an indicator of future growth in services, eased a bit to 56.3 in December after rocketing up to 58.0 in November. Tempe, Arizona-based ISM's factory report for December, by contrast, showed the biggest one-month surge in new orders in two decades.