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U.S. NEWS A7
Thursday 7 January 2016
US Financial Front:
Survey: Growth at services companies slowed in December
JOSH BOAK Department estimated in Collett Elkhouria makes a chicken salad sandwich the Superior Restaurant in Cleveland. The
AP Economics Writer December that U.S. house- Institute for Supply Management said Wednesday that its services index dipped to 55.3 last month
WASHINGTON (AP) — U.S. holds saved an average of from 55.9 in November. The December reading matched the most recent low set in April 2014.
services companies grew $660 on gas last year.
in December at their slow- The services index dropped (AP Photo/Tony Dejak)
est pace since early 2014, despite faster growth last
a private survey found. But month for business activity,
the deceleration occurred new orders and employ-
for a seemingly positive ment. What caused the
reason: Companies made index to fall was a decline
deliveries faster. in supplier deliveries. It fell
The Institute for Supply Man- to 48.5, signaling contrac-
agement said Wednes- tion. But the reason for that
day that its services index decline stems from how the
dipped to 55.3 last month index is calculated: It as-
from 55.9 in November. sumes that rising demand
The December reading should cause supplier de-
matched the most recent liveries to slow and com-
low set in April 2014. Still, panies to commit more
any reading above 50 sig- resources. Last month,
nals that services firms are though, deliveries were
expanding. “We continue completed at a quicker
to see strong domestic de- pace, thereby causing
mand and a robust non- the supplier deliveries por-
manufacturing sector as tion of the index to fall.
driving U.S. activity,” said The ISM is a trade group of
Rob Martin, an economist purchasing managers. Its
at the bank Barclays. U.S. services survey covers busi-
consumers are becom- nesses that employ the
ing financially healthier, vast majority of workers, in-
likely helping much of the cluding retail, construction,
services sector continue health care and financial
its nearly six year rebound services companies. Still,
after declining sharply dur- the U.S. economy faces
ing the Great Recession. headwinds abroad that
Solid hiring over the past have slowed growth. Chi-
year has improved many na is settling uneasily into a
Americans’ economy se- slowdown, while European
curity, while low oil and growth has been grind-
gasoline prices have given ing away and emerging
family budgets a bit more economies such as Brazil
support.b Unemployment and Russia are confronting
held at a stable 5 percent severe downturn.
in November for a second Chinese consumers are es-
straight month, down from pecially struggling. A ser-
5.8 percent a year earlier. vices index for China, the
Employers have added 2.6 Caixin/Markit Purchasing
million jobs over the past Manager’s Index, dipped
12 months, with nearly 90 to a 17-month low of 50.2
percent of the jobs coming in December. But fac-
from the services sector as tory activity is suffering the
auto sales have hit record most from the worldwide
highs and spending at res- turmoil. U.S. manufacturers
taurants has surged. contracted in December
Consumers have also been as new orders and hiring
helped by gas costing an prospects dimmed, the ISM
average of $1.99 a gallon, said Monday. Its index of
a 9.5 percent decline from factory activity fell to 48.2
a year ago. The Energy from 48.6 in November.q
