By Xavier Fontdegloria
U.S. services sector activity continued to expand in December at a faster pace than in the previous month, despite the rise in Covid-19 cases and restrictions to contain the spread of the disease across the country.
The ISM Services Report on Business PMI for December increased to 57.2 from the 55.9 in November. Economists polled by The Wall Street Journal expected the reading to decline to 54.5.
The reading is over the 50 point break-even point that separates expansion over contraction, posting the seventh straight month of growth.
"In December, a slight uptick in the rate of services-sector growth continued," said Anthony Nieves, chair of the ISM Services Business Survey Committee, noting that despite the improvement of the indicator respondents' comments are mixed about business conditions and the economy.
Various local and state-level Covid-19 shutdowns continue to negatively affect companies and industries, he said, and most respondents are cautiously optimistic about business conditions with the recent approval and impending distribution of vaccines.
In December, the ISM services business activity index rose to 59.4 from November's 58.0 level. The new orders index also increased slightly to 58.5 from 57.2 the prior month.
The employment index fell to contraction territory, posting 48.2 from 51.5 the month before, while the prices index retreated slightly to 64.8 from 66.1 in November.
Among the 14 services industries reporting growth in December, there are management of companies and support services, wholesale trade and retail trade.
ISM services PMI also signaled that the U.S. overall economic activity continued to grow in December, as a reading above 48.5 over time generally indicates an expansion of the overall economy. This is the seventh straight month in which the PMI indicates such expansion.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
(END) Dow Jones Newswires
01-07-21 1030ET
