US service sector expands at slower rate in December

FILE - In this Thursday, Dec. 14, 2017, file photo, Owensboro Municipal Utilities line workers Michael Atherton, from left, Sean Warren and Lee Broadley work to remove temporary line switches from power lines at the intersection over Ninth Street and J. R. Miller Boulevard in Owensboro, Ky. On Friday, Jan. 5, 2018, the Institute for Supply Management, a trade group of purchasing managers, issues its index of non-manufacturing activity for December. (Greg Eans/The Messenger-Inquirer via AP, File)

WASHINGTON — U.S. services companies expanded at a slower pace in December for the second straight month, a somewhat expected softening after robust growth in the fall.

The Institute for Supply Management said its services index slipped last month to 55.9 from 57.4 in November. Those months come on the heels of a 60.1 reading in October, which was the fastest pace of growth since August 2005. September's reading of 59.8 also was a 12-year high. Any reading above 50 signals expansion.

"It had to ease up a little bit, because that fast of growth couldn't be sustained for a long period of time," said Anthony Nieves, chair of the ISM non-manufacturing business survey committee.

The services sector has reported growth for 96 consecutive months, a positive sign for the overall U.S. economy.

"All indications are that 2018 will continue with growth," Nieves said.

The service sector accounts for more than 70 percent of U.S. jobs, so any indication of continued expansion likely means steady gains for the broader economy in the coming months.

Measures of business activity and new orders also fell last month, but they still remain in positive territory. The employment index rose by 1 percentage point, which could be attributed in part to holiday hiring.

There were 14 non-manufacturing sectors that reported growth in December, including retail trade, utilities, health care and real estate. The three sectors reporting contraction were information, educational services and management of companies.

You may also interested in

Gap offers muted outlook for annual earnings, lower profit

Aug 18, 2016

Gap offers a downbeat annual profit outlook after reporting a 43 percent drop in net income for the second quarter

Tesla lays claim to world's fastest production car

Aug 23, 2016

Tesla Motors says new version of the Model S electric car is now the quickest production car in the world from zero to 60 miles per hour

How EpiPen's maker raised prices, and hackles, so much

Aug 23, 2016

Sky-high price hikes for an emergency allergy medicine are making drugmaker Mylan the latest target for patients and politicians infuriated by soaring drug costs

People also read these

Officials: Zika won't hurt South Florida tourism in long run

Aug 20, 2016

The discovery of Zika-carrying mosquitoes in South Florida certainly isn't ideal for tourism, but local officials and business leaders are confident the long-term impact on the tourism industry will be minor

Rural church among those providing aid after Louisiana flood

Aug 21, 2016

Rural church among those providing aid, including food and prayer services, after Louisiana flood

Beer mega merger: what court ruling means for troubled deal

Aug 23, 2016

A British court has recommended that two classes of shareholders be created and vote separately on AB InBev's 79 billion pound ($104 billion) takeover of SABMiller

Emporium Post fulfils the need to know all things about consumers and how businesses can take this opportunity to reach their own customers.

Contact us:

Join our mailing list now!