The U.S. services sector expanded at a slower pace in December as the non-manufacturing business activity composite index was 56.2 in the month, compared to 59.3 in November, on a seasonally adjusted basis, the Institute for Supply Management reported Tuesday.
Economists polled by Thomson Reuters had expected a 58.2 level.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
The prices paid index dropped to 49.5 from 54.4.
The employment index decreased to 56.0 from 56.7.
The business activity/production index fell to 57.2 from 64.4, the new orders index was at 58.9, up from 61.4; backlog of orders slid to 49.5 from 55.5; new export orders declined to 53.5 from 57.0; inventories decreased to 50.0 from 55.5; inventory sentiment slipped to 59.0 from 63.0; the supplier deliveries index fell to 52.5 from 54.5; and imports dropped to 50.0 from 53.5.
Members' general comments on business in the month included:
"Delays at West Coast ports are requiring re-routing to east coast facilities." (Management of Companies & Support Services)
"Still struggling with supply of solutions for patient care." (Health Care & Social Assistance)
"Low oil prices are easing tensions on wholesale prices. Energy exports should be able to boost the economy upward. Obamacare and wages are still the biggest enemies to profitability." (Accommodation & Food Services)
"Outlook for 1Q 2015 is strong. Up from a relatively strong 4th quarter 2014." (Professional, Scientific & Technical Services)
"Reduced fuel prices will improve the cash position of the company." (Transportation & Warehousing)
"We are finishing the year strong." (Wholesale Trade)
"Another terrific month in the auto industry. Sales are near historic highs." (Retail Trade)
