Service sector growth in the U.S. slowed to a crawl in the month of December, the Institute for Supply Management revealed in a report on Friday.
The ISM said its services PMI fell to 50.6 in December from 52.7 in November. While a reading above 50 still indicates growth, economists had expected the index to show a much more modest decrease to 52.6.
The bigger than expected drop by the headline index partly reflected a slowdown in the pace of growth in new orders, with the new orders index sliding to 52.8 in December from 55.5 in November.
The report also showed a significant downturn in employment in the service sector, as the employment index slumped to 43.3 in December from 50.7 in November.
Meanwhile, the ISM said the business activity index rose to 56.6 in December from 55.1 in November, indicating a faster rate of growth.
The report also said the prices index edged down to 57.4 in December from 58.3 in November, suggesting prices grew at a slightly slower rate.
A separate report released by the Institute for Supply Management on Wednesday showed U.S. manufacturing activity contracted at a slightly slower rate in the month of December.
The ISM said its manufacturing PMI rose to 47.4 in December from 46.7 in November, but a reading below 50 still indicates contraction. Economists had expected the index to inch up to 47.1.
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December 19, 2025 15:10 ET U.S. inflation data and interest rate decisions by major central banks were the highlights of this busy week for economics news flow. Employment data and survey results on the housing markets also gained attention in the U.S. In Europe, the European Central Bank and Bank of England announced their policy decisions and macroeconomic projections.