US services sector growth eases in December

Growth in the US services sector unexpectedly eased in December, to a three-month low, according to figures released on Monday.

Markit’s flash services business activity index edged down to 53.4 from 54.6 the month before, but remained above the 50 threshold that separates contraction from expansion for the tenth consecutive month.

Economists had been expecting the index to push up to 55.2.

Meanwhile, the final composite purchasing managers’ output index printed at 53.7 in December, down from 54.9, signalling the slowest upturn in private sector output for three months.

Chris Williamson chief business economist at IHS Markit, said: “Although service sector growth cooled in December, the PMI surveys indicate that the economy continued to show solid, steady growth at the end of the year. The surveys are consistent with GDP rising at an annualised rate of 2.0% in the fourth quarter, fuelled mainly by improving domestic demand.

“The December slowdown looks likely to be a temporary blip, not least because firms took on staff in increasing numbers in the expectation of rising workloads in 2017. The two flash PMI surveys are signalling a respectable 190,000 increase in nonfarm payrolls in December.”