U.S. Services Gauge at Four-Month High in Sign Growth Steady
The Institute for Supply Management’s non-manufacturing index climbed to 55 from 53.9 a month earlier.
(Bloomberg) --
A rebound in sales and production lifted a gauge of U.S. service activity to a four-month high in December, indicating the broader economy remains stable in the face of further deterioration in manufacturing.
The Institute for Supply Management’s non-manufacturing index climbed to 55, exceeding the median projection in a Bloomberg survey of economists, from 53.9 a month earlier, according to data issued Tuesday. A measure of business activity, which parallels the group’s index of factory production, jumped 5.6 points to 57.2 from the lowest level since 2010.
The improvement in services activity contrasts with ISM’s factory index, which contracted for a fifth month and posted the lowest reading since mid-2009. Annual figures show service providers have nonetheless been caught up in a manufacturing downdraft characterized by weak export markets, antagonistic trade policies and an investment pullback. Stocks remained lower and the dollar higher after the non-manufacturing report.
The ISM’s non-manufacturing index averaged 55.5 for all of 2019, the lowest in three years and down from 58.9 in 2018. The annual average for the group’s factory gauge was the weakest in a decade.
Details of December activity within the service industries were slightly more downbeat than the headline number suggested. The gauge of new orders fell to a three-month low of 54.9, while the index of service employment eased to 55.2 from 55.5. Readings above 50 indicate growth.
Eleven non-manufacturing industries, led by retail and entertainment, reported growth in December, while six indicated declining activity.
A gauge of service industries activity from IHS Markit rose to a five-month high of 52.8 in December from 51.6, according to a separate report Monday.
--With assistance from Chris Middleton.
To contact the reporter on this story: Vince Golle in Washington at vgolle@bloomberg.net
To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Ana Monteiro, Jeff Kearns
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