PMI Services Flash Report Slowing Sharply

The services PMI is slowing sharply this month, to 53.7 vs 56.1 for the final November reading and vs 56.5 for the flash reading. This is the lowest reading in a year reflecting the slowest growth in new orders since January and a fifth straight month of contraction in backlog orders. Optimism over future growth is understandably down, reflecting what the report says is a subdued global outlook, election uncertainty and softer demand in the energy sector. Price readings remain subdued with inputs at their weakest pace since February. Despite weakness in orders and the downcast outlook, hiring is described as "resilient". Given weakness in global demand, the service economy is the nation's bread and butter and today's report, though only one data point, hints at slowing for the economy.

Recent History Of This Indicator:
The services PMI has been one of the strongest indicators on the calendar and more of the same is expected for the flash December reading, at a consensus 56.1 which would match November's final reading. The report described new orders in November as "robust" and "accelerating" with hiring described as "sustained". The service sector, where exposure to global weakness is limited, is the bread and butter of the U.S. economy.