The U.S. service sector is recovering pace in December – an ISM review

WASHINGTON (Reuters) – U.S. services industry activity accelerated in December, but COVID-19 spacecraft rockets lowered employment, increasing the risk that the economy lost jobs for the first time since its recovery began. labor market from pandemic.

The Institute for Supply Management (ISM) said on Thursday that their non-manufacturing activity index increased to a reading of 57.2 last month from 55.9 in November.

That raised the index to within a remarkable distance of its 57.3 level in February, before the pandemic reached the United States. A reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of U.S. economic activity. Economists surveyed by Reuters had forecast that the index would fall to 54.6 in December.

The dramatic rise in service sector activity mirrors a similar increase in factory output last month, despite a new wave of coronavirus cases in the country.

Similar to the manufacturing data, the improvement in the services industry index was partly due to an increase in the survey volume of supplier delivery to readings of 62.8 last month from 57.0 in November. An increase in supplier delivery times is usually associated with a strong economy and increased customer demand, which would be a good help.

But in this case that reflects a shortage of supply as a result of the pandemic.

The ISM survey measure of new orders for the services industry fell back to a reading of 58.5 in December from 57.2 in November. That came as a measure of export orders jumping to 57.3 from a reading of 50.4 in November. But the global resurgence in the virus indicates that strong export growth is unsustainable.

Contracted backup orders, reflecting imminent slowdown in services industry activity.

The survey index of earnings in the services industry fell to a reading of 48.2 last month from 51.5 in November. That increases the likelihood that the economy lost jobs in December for the first time since April. Wednesday’s report showed a decline in employment at private companies last month.

But a survey from the ISM on Tuesday showed that factory earnings had reconnected in December.

According to a Reuters study of economists, nonfarm payrolls are likely to have increased 71,000 jobs after rising 245,000 in November. That was the smallest gain since the recovery of jobs began in May and meant that the economy recovered about 12.5 million of the 22.2 million jobs lost in March and April.