The U.S. ISM non-manufacturing index rose 1.1 points to 55 in December, coming in above consensus expectations of a rise to 54.5. The details of the report came in mixed. Most of the boost to the headline came from the business activity subcomponent, which rebounded to 57.2 reversing the fall in the prior month. The supplier deliveries index also rose to 52.5. In the meantime, the employment subcomponent and new orders both dropped, falling 0.3 points and 2.2 points to 55.2 and 54.9, respectively.
Other indicators also came in mixed. Backlog of orders fell to 47.5 from 48.5, remaining in contractionary territory. Import orders rose for the first time since July, but stayed in contractionary territory. Export orders dropped, falling 1 points to 51. After moving higher in the prior month, the prices paid subcomponent stayed the same at 58.5 in December.
Growth was slightly less broad based than in November. Out of 18 industries, 11 saw growth in December, down from 12 in November.
“Luckily, the outlook for consumer spending remains upbeat. With the labor market continuing to churn out solid job gains, interest rates remaining low, and wages rising at a decent pace, the fundamentals for consumption are healthy heading into the new year. As a result, American consumers will help to insure continued growth of services sector”, stated TD Economics in a research report.
