The main US services sector PMI for December

  • Five month low

  • Prior was 57

  • Employment 56.3 vs 58.4 prior

  • New orders 62.7 vs 62.5 prior - six month high

  • Prices paid 57.6 vs 64.3 lowest since July 2017

  • Inventories 51.5 vs 57.5 prior

  • Inventory sentiment 59.0 vs 60.0 prior

  • new export orders 59.5 vs 57.5 prior

  • Imports 53.5 vs 54.5 prior

  • Backlog of orders 50.5 vs 55.5 prior

  • Full report

The headline is a disappointment but that tick higher in new orders should help to moderate the reaction.

Commentary in the report:

  • "New residential home sales have slowed significantly. Tariff delay has slowed material cost increases, but all indications are that January will bring price increases." (Construction)
  • "Economy still chugging along, despite the rise in interest rates and relentless political claptrap. Mid-winter [activity] appears to be helping a variety of sectors, including agriculture and construction." (Finance & Insurance)
  • "Overall, our year-end outlook is positive. We are already receiving converted RFPs to orders for 2019. Based on the uncertainty of the tariffs, we have advised our clients to make purchases early in first quarter 2019, if possible, to save money. There is concern in our industry regarding the full year due to tariffs, unless a deal can be reconciled with China. We expect lower profit margins and reduced sales for 2019 until our suppliers can source product from other countries, which may not be until late [in the year]." (Management of Companies & Support Services)
  • "Business is still on an uptrend. Receiving more inquiries for training going into new year." (Professional, Scientific & Technical Services)
  • "Steady demand and supply. Finding qualified employees is a challenge." (Public Administration)
  • "Business is exceeding expectations. 2019 should equate or exceed 2018." (Real Estate, Rental & Leasing)
  • "Business is very good. Strong demand and pipeline." (Retail Trade)
  • "The end of the year continues to be busy, with high load factor." (Transportation & Warehousing)
  • "Overall, the industry looks to have a pullback year in demand for 2019. Several factors are contributing to this: stock market retraction, tariffs, trade dispute with China, higher mortgage rates, higher home prices, stagnant wage growth, labor shortages and higher material costs." (Wholesale Trade)