US Services Growth Cools to Three-Month Low

Source: IHS Markit

The growth of US service providers fell to a three-month low in December, dragged by the sustained pressure on capacity during the month.

• The IHS Markit US Services PMI Business Activity fell to 57.6 in December from 58.0 in November, marking the lowest in three months.
• Firms reported staffing concerns and difficulties in retaining workers, denting job creation, and bringing employment growth to a three-month low.
• Capacity constraints also continued to drive work backlogs higher, driven by labor and input shortages along with higher client demand.
• Providers indicated a softer increase in output prices, but inflation was little changed from the series-high in October. Charge hikes were linked to the competition.
• The Composite PMI Output Index fell to 57.0 from 57.2 in November, still signaling a steep increase in the private sector business activity for the month.
• Business confidence strengthened to the highest level since November 2020, as companies were optimistic about the more favorable market and supply chain conditions.