U.S. services gauge strengthened unexpectedly in December

Growth at U.S. service providers unexpectedly accelerated in December as gains in business activity and new orders helped offset a decline in a measure of employment.

The Institute for Supply Management’s services index rose to 57.2 during the month from 55.9 in November, according to data released Thursday. The December figure exceeded all economists’ forecasts in a Bloomberg survey which had a median projection of 54.5. Readings above 50 indicate expansion. The pickup in growth at companies that make up the biggest part of the economy is surprising given the increase in coronavirus cases and tighter business restrictions in some states. At the same time, the employment gauge contracted for the first time in four months, showing the ongoing drag in the job market from the pandemic.