Service sector strength in US weakens
US services sector activity slowed to a five-month low in December, but remained above a level consistent with solid economic growth in the fourth quarter.
The Institute for Supply Management said on Monday its non-manufacturing activity index fell to 57.6 last month, the lowest reading since July, from 60.7 in November.
Still the index stayed well above the 50 mark, suggesting expansion of the vast services sector. Analysts polled by Reuters had forecast a reading of 59.0.
Economists said while the drop in the services industries measure echoed recent declines in other business surveys, the reading was still strong by historic standards.
“We have seen a range of different indicators lately that point to some softening in the economy as well as rising recession risks, but we think that the economy will continue to expand at a decent pace despite some moderation in growth,” said Daniel Silver, an economist at JPMorgan in New York.
Growth estimates for the fourth quarter are around a 2.6 percent annualised rate. The economy grew at a 3.4 per cent pace in the third quarter.
The dollar fell against a basket of currencies, pressured by growing expectations the Federal Reserve will either pause or halt its interest rate hike cycle.