In December, The Service Sector In The United States Grew At A Slower Pace
The service sector in the United States, where the majority of Americans work, slowed in December after rising at a record rate the previous two months.
After two months of record growth, the service sector in the United States, where the majority of Americans work, slowed in December.
The Institute for Supply Management announced on Thursday that its monthly survey of service sectors fell to 62 from an all-time high of 69.1 in November. A reading of more than 50 shows progress.
Since last year's two months of contraction in April and May, when the pandemic was at its peak, the overall index has climbed for 19 months in a row.
According to Anthony Nieves, chairman of the ISM services sector survey committee, growth in the services industry is continuing strong, and the recent increase of the COVID-19 omicron type did not appear to have had any influence on December activity in the sector. If the viral spike is not stopped before then, it is more likely to influence next month's activities, he added.
According to the ISM survey, business activity, employment, new orders, and supply deliveries all grew at a slower pace in December.
The ISM's inventory index fell for the seventh consecutive month as firms struggled to keep shelves supplied due to supply chain bottlenecks and high demand. Prices paid by services companies for materials and services increased for the 55th month in a row in December, reaching an all-time high of 82.5.
Some of the services sector's strengths are the consequence of supply chain issues that are making it more difficult to fulfill rising demand. The services sector's strengths include longer supplier delivery times and increased costs.
Companies are still having trouble recruiting, despite the fact that the employment market is better than it has been since the epidemic began over two years ago. Last month, the jobless rate decreased to 4.2 percent, which most economists believe to be near to full employment.
The Federal Reserve said this month that its low-interest rate policies are no longer needed, owing in part to the solid job situation. Those low rates were supposed to stimulate more hiring, but the Fed now sees an overheated economy and has signaled that it will increase rates swiftly to control inflation, which has reached four-decade highs.
In December, 16 of the ISM's 18 service industries showed increase.