The ISM index stood at 62% in December against 69.1% in November and 67.1% expected by analysts.
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Activity in services in the United States slowed sharply in December after hitting an all-time high the month before, with companies suffering from inflation and shortages of equipment and personnel, but growth remains “solid”, according to the ISM federation.
The index, which measures the level of business activity, stood at 62% in December against 69.1% in November, the ISM professional federation said Thursday.
The slowdown is stronger than expected by analysts, who expected 67.1%.
Activity expands when the index is above 50%, and slows down when it is below this threshold.
“Although there was a decline in most indices in December, the growth rate remains solid for the service sector,” detailed the president of the ISM survey, Anthony Nieves, quoted in a statement.
The companies that responded to this survey, throughout the month of December, “indicated (that they) continue to fight inflation, supply chain disruptions, capacity constraints, logistical challenges. and labor and material shortages, ”he said.
This is the 19th month of growth in a row (just over a year and a half since the decline observed at the very start of the pandemic).
However, the investigation does not mention the appearance of the Omicron variant, which has increased cases of COVID-19 contamination, which has led to the cancellation of many events related to the holiday season, and disrupted the activity of restaurants and bars, among others.
This also disrupts the functioning of economic activity, because many employees have been contaminated or are in contact, and are therefore not able to work. Airlines have had to cancel thousands of flights in recent weeks.
And, while high inflation is a matter of concern to economists and to Joe Biden’s administration, the index measuring prices continued to climb in December.
The service sector, vital for the American economy, is the one that has suffered the most from the restrictions imposed to contain the spread of the coronavirus, such as hotels, restaurants and travel.
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