Abrupt Pullback in December after Record Growth by U.S. Service Providers

    The Growth of U.S. service providers was abruptly pulled back in December after soaring to a record high in November, reflecting a moderate yearly growth in business orders.

    The barometer for service activities monitored by the Institute of Supply Management dropped from 69.1 in November to 62 in December as per data released on Thursday’s figure. The final figure fell short of the median projection of 67 provided in a survey conducted by Bloomberg. A figure above 50 on the index indicates expansion.

    The decline of 7.1 points was sharpest since 2020 April and suggests that the omicron variant is taking its toll on service providers to cater to in-person services such as dining out, travel, and entertainment. However, the service gauge is still above the pre-pandemic levels.

    As per Bloomberg News, the chairman of the ISM Services Business Survey Committee, Anthony Reeves, said in a statement that the rate of growth in the service sector continues to remain strong despite pullback for most indexes in December. The respondents in the survey showed that they continued to struggle with supply chain bottlenecks, inflation, logistics challenges, capacity constraints, and shortage of materials and labor.

    Led by food and accommodation services, construction, and wholesale trade, the service industry saw growth in 16 sectors last month. The ISM barometer, which is parallel to the group’s factory production output measure, was the lowest in three months at 67.6 in November. 

    Since February, service providers ordered the lowest at 61.5 indexes, down by 8.2 points. The November orders index recorded the highest data since 1997. 

    The employment index fell marginally, cooling from 56.5 in November to 54.9 in December. Service Providers struggled to hire and retain workers in a competitive labor market as businesses were offering bonuses and higher wages to attract workers. 

    The supply-chain constraints which are still elevated may start to ease as per the ISM report. The committee supplier deliveries dropped to a month low of 63.9 from 75.7 November index readings. The order backlog dropped to 62.3 on the index in a three-month low. This also saw a reduction in inventory levels for suppliers in December. 

    The ISM report also indicated that service providers continued to be under inflationary pressures. The material purchase moved up to 82.5 from 82.3 between November and December in the ISM index.

    Services inflation readings in a separate report were at odds with ISM readings on Tuesday. It showed that the prices manufacturers paid had slumped in December and the lowest in more than a year. This weighed on the overall index of ISM factory activity. However, the demand indicators remain firm and suggest that the service industry will continue to expand and grow at a healthy rate in the coming months. 


    RELATED ARTICLES

    Pookie Baba

    Is Pookie Baba Real? Internet Reacts in India

    In the short-evolving global of virtual content and meme culture, few personalities have captured the...
    When was Studio Ghibli founded

    When Was Studio Ghibli Founded: Japan’s Iconic Animation Legacy

    Studio Ghibli is a popular Japanese animation studio, known by many for its stunning movies,...
    US-Ukraine talks

    US-Ukraine Talks: Zelensky Seeks Meaningful Outcomes Amid War

    Ukrainian President Volodymyr Zelensky hopes the subsequent talks between Ukraine and the United States will...
    OTT platforms

    OTT Platforms: Reviving Local Languages, Culture, and Heritage in India

    OTT systems have revolutionized content material intake in India, presenting audiences with admission to numerous...
    mental health

    Mental Health Awareness In India: Breaking The Stigma In 2025

    One of the aspects of our overall well-being is mental health, and it should not...
    women safety in India

    Women Safety in India: Key policy changes and ongoing challenges

    For an extended period, Indian society has maintained women's safety as both domestic and international...
    Why Social Media Marketing Matters for Business Success

    Why Social Media Marketing Matters for Business Success

    Social media platforms help businesses connect with customers directly. You can see these online spaces...
    HDhub4u.earth

    HDhub4u.earth: Latest HD Movies for India

    In the digital age, which is always changing, online movie streaming and downloading have become...
    Cricket 07 Wheon.com

    Cricket 07 Wheon.com: India’s Retro Favorite

    For a lot of cricket fans and gamers at large, the mention of Cricket 07...
    HDhub4u.esq

    HDhub4u.esq Movies in HD for Indian Viewers

    In the constantly changing digital climate, the way that people enjoy entertainment has changed greatly....
    Juice Wrld Fortnite Skin

    Juice Wrld Fortnite Skin: Unlocking the Legend in 2025

    Juice Wrld Fortnite skin fans, are you ready to dive into the ultimate quest? Finding...