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Service sector slowdown in U.S.

Staff Writer |
December data pointed to divergent trends across the U.S. private sector economy, with a slowdown in services growth more than offsetting a robust and accelerated upturn in manufacturing output.

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As a result, the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index dropped to 53.0 in December, from 54.5 in November.

The latest reading signalled the weakest expansion of private sector business activity since March.

Manufacturing production expanded at the fastest pace since January, while service sector output growth eased to a 15-month low.

A similar easing in new business growth was seen across the private sector economy in December.

Resilient client demand and a modest rise in backlogs of work nevertheless encouraged firms to expand their operating capacity, as highlighted by another solid rise in payroll numbers at the end of 2017.

Input price inflation eased to a nine-month low during December, but the overall trend masked a steep and accelerated rise in manufacturers’ cost burdens.

The latest increase in input prices across the manufacturing sector was the fastest for exactly five years.

Meanwhile, prices charged inflation eased in December, with both manufacturing companies and service providers recording slower rises in their average charges.

The composite index is based on original survey data from the IHS Markit U.S. Services PMI and the IHS Markit U.S. Manufacturing PMI.

At 52.4 in December, down from 54.5 in November, the seasonally adjusted IHS Markit Flash U.S.

Services PMI Business Activity Index1 signalled the slowest upturn in service sector activity since September 2016. â–