PT Solid Gold Berjangka | US service sector slows in December as employment plummets – ISM survey
Ekonomi AS ISM AS PT SGB Solid Group SG Berjangka Solid Gold Berjangka
Solid Gold Berjangka | The Institute for Supply Management (ISM) reported a significant slowdown in the U.S. services sector in December, as indicated by its non-manufacturing Purchasing Managers’ Index (PMI), which fell to 50.6 from 52.7 in November. A reading above 50 signifies growth in the services industry. The decline in the index, reaching its lowest level since May, was unexpected, with economists anticipating a more modest change at 52.6.
The surge in demand for services that followed the easing of COVID-19 lockdowns has diminished, with consumer spending shifting towards goods. Spending on goods outpaced spending on services in the third quarter. The measure of new orders received by services businesses also dropped to 52.8 from 55.5 in November, indicating a slowdown in demand. Export order growth similarly decelerated.
Despite the slowdown in economic activity, services inflation remained elevated. The measure of prices paid for inputs by businesses slipped to 57.4 from 58.3 in the prior month. It’s worth noting that inflation, as measured by the personal consumption expenditures price index, fell on a monthly basis in November for the first time in more than 3-1/2 years.
The ISM survey’s employment measure for the services sector plunged to 43.3, marking the lowest level since July 2020, when the economy was grappling with the initial impact of the pandemic. This decline reflects challenges in the labor market for the services industry.
Despite the economic challenges, the U.S. Labor Department’s payrolls report for December indicated that U.S. employers hired more workers than expected and raised wages at a solid pace. However, the ISM survey suggests a contrasting picture, with the services sector employment index hitting its lowest level in nearly 3-1/2 years.
Market expectations have shifted towards the possibility of the Federal Reserve cutting interest rates, especially considering easing labor market conditions and cooling inflation. The Fed has held rates steady recently, signaling a shift in its monetary policy stance, indicating that the tightening cycle of the past two years has concluded, and lower borrowing costs are anticipated in 2024.