Services PMI Ends Year Stronger Than Expected

The services PMI ended December at a stronger-than-expected 54.4 and well up from the month's flash at 53.4. Yet December is still 3 tenths under November with new orders at a 14-month low and expectations for future output at a 12-month low.

The slowing is confirmed by price readings with the rise in input costs the slowest since August and selling prices the lowest of 2018. But there are positives in the report led by job creation though backlog orders declined which hints at slowing job growth ahead.

Economic data, aside from this morning's employment report, have generally been slowing including this report. Today's service results together with December's manufacturing PMI, which came in at 53.8, make for a PMI composite of 54.4 vs 53.6 for the flash and vs 54.7 in November.