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US Dec services sector activity growth slowest since Feb: Markit
[NEW YORK] The US services sector expanded in December at its slowest rate since February as growth in employment and new business slowed, an industry report showed on Thursday.
Financial data firm Markit said its "flash" services Purchasing Managers Index hit 53.6 in December, down from November's final reading of 56.2 and well below economists'expectations for a rise to 56.9 according to a Reuters poll.
The growth rate has slowed steadily since peaking this year at 61 in June, but is still above the 50 level that signals expansion in economic activity.
"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," said Chris Williamson, chief economist at Markit.
"The extent of the slowdown suggests that economic growth in the fourth quarter could come in below 2 per cent which, with the exception of the downturn caused by adverse weather in the first quarter, would be the worst performance for two years."
The services sector new business subindex fell to 53.1, the lowest level compared to final readings since March, versus the final reading of 55.8 in November.
The employment subindex also slipped, coming in at its lowest since April compared to final readings.
Markit's "flash" composite PMI, a weighted average of its manufacturing and services indexes, hit 53.8 in December versus 56.1 in November. That marked its lowest level since October 2013, while the employment subindex also slipped.