Strong Growth in US Services Sector: December PMI Report
The U.S. services sector showcased a robust expansion in December 2024. The Institute for Supply Management (ISM) Services PMI rose to 54.1%, a leap from November’s 52.1%. This figure surpassed economists’ expectations of 53.5%. It marked the sixth consecutive month of growth and the 10th instance this year where the index has been in expansion territory.
The Business Activity Index saw a significant surge in December, reaching 58.2%. This figure represents a 4.5 percentage point increase from November’s 53.7%, indicating a strengthening momentum in the services sector. New Orders also saw improvement, reaching 54.2%, while Employment remained stable at 51.4%.
However, the Prices Paid component saw a dramatic jump from 58.2% to 64.4%, well above the expected 57.5%. This signals potential inflationary pressures.
Steve Miller, Chair of the ISM Services Business Survey Committee, noted that many industries reported end-of-year seasonal factors driving business activity. Some of this increased activity was attributed to preparation for potential tariff impacts and supply chain disruptions. The strong services performance corresponds to a projected 1.7 percentage point increase in real GDP on an annualized basis. This reinforces the sector’s critical role in the U.S. economic expansion.
Source: www.prnewswire.com