US services sector activity grows, while job openings expand
2025.01.07 11:24
Investing.com – US services sector activity accelerated by more than anticipated in December, closing out the year above levels that suggest solid economic growth during the fourth quarter, while a separate release showed job openings expanded in November.
The increased to 54.1 in last month, up from 52.1 in November. Economists had predicted a reading of 53.5.
A figure above 50 typically denotes expansion in the services industry, which accounts for more than two-thirds of the world’s biggest economy. Meanwhile, the ISM has said any level above 49 generally indicates growth in the overall economy.
Elsewhere, a gauge of prices surged by 6.2 points to 64.4, the highest level since February 2023, although new orders edged up by 0.5 points to 54.2.
The numbers serve as measures of the state of the economy at both the end of the final quarter of 2024 and as the incoming Trump administration comes to power later this month. As in November, businesses across a range of industries flagged worries over the impact of Trump’s plans to impose sweeping import tariffs. Some economists have predicted the move could reignite inflationary pressures.
“There was general optimism expressed across many industries, but tariff concerns elicited the most panelist comments,” said Steve Miller, Chair of the ISM’s Services Business Survey Committee, in a statement.
Separately, the amount of available employment roles in the US grew to 8.098 million in November, increasing from 7.839 million in October, according to the Department of Labor’s . The data, a proxy for labor demand, comes ahead of the all-important monthly US employment report on Friday.
The Federal Reserve will likely be closely monitoring these releases as policymakers attempt to assess how to approach any potential future interest rate reductions. Recent comments have suggested that officials, wary in part of lingering inflation, are taking caution before further cutting borrowing costs.
“The economic data […] has hawkish implications for monetary policy and is a net negative for stocks,” analysts at Vital Knowledge said in a note.
