The US services sector is growing at a nice pace, but it slowed a bit in December.
Markit’s flash US services PMI fell to 53.6, down from 56.2 in November.
This was weaker than the 56.3 expected by economists.
It’s worth noting that any reading above 50 signals growth.
“A sharp slowing in service sector activity alongside a similar easing in the manufacturing sector takes the overall rate of economic expansion down to the weakest since October 2013,” Markit’s Chris Williamson said. “The extent of the slowdown suggests that economic growth in the fourth quarter could come in below 2% which, with the exception of the downturn caused by adverse weather in the first quarter, would be the worst performance for two years.”
Here’s more from Williamson:
“The slowdown is linked to weaker growth of new business as customers becoming increasingly worried about the economic outlook both at home and abroad, with the prospect of higher interest rates cooling demand alongside side rising global geopolitical concerns. Across both manufacturing and services, new business grew in December at a pace well below the rates of expansion seen earlier in the year.
“Job creation has also slowed sharply alongside the cooling of demand, and payroll numbers across both sectors showed the smallest rise for eight months. Another bumper month of non-farm payroll growth looks unlikely in December, with private sector payroll growth unlikely to breach the 200,000 mark.”
Read the whole report at MarkitEconomics.com.
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