The US services sector grew for an 11th straight month in December but more modestly than in November, a survey said today, the latest in a series of reports that point to a modest economic recovery.
The Institute for Supply Management said its index of non-manufacturing business activity slipped to 54.7 in December 2002 after a strong surge to 57.4 in November. The December reading was slightly lower than forecasts of a drop to 55.9.
The services sector includes a large swathe of businesses, from entertainment to banking, and makes up the vast majority of the US economy. A number on the ISM index above 50 denotes expansion; a reading below 50 shows contraction.
A more closely watched December index on factories nationwide released by the same group on Thursday was well above expectations, showing broad strength in nearly every sub-category. That prompted a powerful stock market rally on the first trading day of the New Year and sparked some optimism the ISM services index would show similar strength.
"Taken together, the ISM surveys of manufacturing and non-manufacturing activity raise the hope that the economy may be working its way out of its recent soft spot," said Ms Jade Zelnik, chief economist at RBS Greenwich Capital.
"At the very least, they refute the notion that activity is on the verge of a downturn." she added.