Investing.com – Business activity in the U.S. private sector hit a nine-month low in December, as a slowdown in services offset better performance in manufacturing, according to preliminary data released on Thursday.
In a report, market research group IHS Markit said that its composite purchasing managers’ index (PMI), covering both the manufacturing and services sectors, fell to to 53.0 in December, from the prior reading of 54.5.
On the indices, a reading above 50.0 indicates expansion, below indicates contraction.
By sectors, the research group said that its flash services purchasing managers’ index (PMI) unexpectedly decreased to 52.4 in December, from the prior month’s reading of 54.5.
Analysts had expected the reading to rise to 54.6.
Services make up approximately 80% of the U.S. economy which makes the data key for interpreting growth.
To the contrary, IHS Markit said that its flash manufacturing purchasing managers’ index (PMI) increased to 55.0 in December from the prior month’s final reading of 53.9.
Economists had estimated that it would rise to just 54.2.
IHS Markit chief economist Chris Williamson said the data was a “mixed bag of news”.
“While manufacturing is ending 2017 with the wind it its sails, the service sector is struggling in the doldrums by comparison,” he said.
According to his calculations, the readings suggested GDP growth of about 2% in the fourth quarter.
“With services representing a far greater portion of the economy than manufacturing, the overall picture is therefore one of the manufacturing sector’s exuberance being overshadowed by the gloomier service sector,” Williamson explained.
After the report, EUR/USD was trading at 1.1799 from around 1.1807 ahead of the release of the data, GBP/USD was unchanged at 1.3410, while USD/JPY also remained at 112.66.
The US dollar index, which tracks the greenback against a basket of six major rivals, traded at 93.61 compared to 93.59 before the report.
Meanwhile, U.S. stocks were trading higher after the open. The Dow 30 gained 57 points or 0.23%, the S&P 500 rose 2 points, or 0.09%, while the tech-heavy Nasdaq Composite traded up 11 points, or 0.16%.
Elsewhere, in the commodities market, gold futures traded at $1,254.40 a troy ounce, compared to $1,254.00 ahead of the data, while U.S. crude oil changed hands at $56.48, compared to $56.30 earlier.