The U.S. services sector continued to expand in December, with the ISM Services Purchasing Managers’ Index (PMI) rising to a 14-month high of 54.4, above the consensus estimate of 52.2. A reading above 50 signals expansion, while a reading below 50 signals contraction.
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“In an encouraging sign, the PMI® readings in November (52.6 percent) and December are in line with the same months in 2024 (November 52.5 percent; December 54 percent),” said Steve Miller, Chair of the ISM Services Business Survey Committee.
Services PMI Stays in Expansion as Price Pressures Persist
The Services PMI has now remained in expansion territory for ten consecutive months. At the same time, many businesses are still grappling with uncertainty and higher prices driven by tariffs, seasonality, and the lingering effects of the government shutdown. That was reflected by the Prices Index at 64.3, marking its 13th consecutive month above 60.
The report also showed that the Employment Index returned to expansion territory for the first time since May 2025, while inventories expanded for the second consecutive month.
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