US service-sector growth hits 14-month high

(Sharecast News) - The US services sector grew at its fastest rate in 14 months in December, according to the Institute for Supply Management on Wednesday, as activity accelerated for the third month in a row. The ISM services purchasing managers' index (PMI) came in at 54.5% last month, marking its 10th straight month in positive territory - marked by any figure above the neutral 50.0 level - and up from 52.6% in November.

This was the highest reading since October 2024 and comfortably ahead of consensus estimates, which had pointed to a decline to 52.3%.

The business activity index rose 1.5 points to 56.0%, while the new orders index surged 5 points to 57.9%. Meanwhile, the employment index moved into expansion territory for the first time in seven months, jumping 3.1 points to 52%.

"December's Services PMI is a continuation of a downward trend (as noted in previous reports) of more than 10 percentage points in the 12-month average since February 2022, when it was 62.6%," said Steve Miller, the ISM's chair.

However, he added: "In an encouraging sign, the PMI® readings in November (52.6%) and December are in line with the same months in 2024 (November 52.5%; December 54%). Also, for the first time since February 2025, all four PMI subindexes are in expansion territory."