Business activity in US services sector slowed in December

Business activity in US services sector

Business activity in US services sectorThe companies in the service sector in the US maintain the high business activity at the end of 2016, although the pace of expansion has slowed since the reached peak in October. The Purchasing Managers’ Index (PMI) of private company Markit decreased from 54.6 points in November to 53.4 points in December, while the market expectations were for growth to 55.2 points.

The tenth consecutive month the broad measure is above key threshold of 50 points, which is the dividing line between expansion and contraction.

The study shows that there is an acceleration in employment growth in the sector for the third consecutive month, and even greater optimism about the prospects for the business activity next year. Meanwhile, in December increased the pressure on costs, as well as the increase in prices for production in December is one of the steepest since mid-2015.

Although the growth in the services sector slowed in December, the survey shows that the economy continues to be solid, consistent growth year-end.

The study indicates for GDP growth of 2% yoy in the last quarter, mainly encouraged by the improving domestic demand. The slowdown in December likely to be temporary, not least because of hiring new people and expectations of more orders in 2017.

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