Investing.com - U.S. private sector activity showed its weakest pace of expansion in 19 months, according to survey data released on Friday.
The preliminary reading of the IHS Markit composite purchasing managers’ index, which measures the combined output of both the manufacturing and service sectors, fell to 53.6 this month from 54.7 in November. That was its lowest level since May 2017.
The services purchasing managers’ index came in at 53.4 this month.
Economists had forecast the index remain unchanged at 54.7.
The manufacturing PMI dropped to 53.9 in December, compared to 55.3 a month earlier.
Analysts had expected a reading of 55.1.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
“The flash PMIs bring signs of the U.S. economy ending 2018 on a softer note. With business activity expanding at the slowest rate for one and a half years, the surveys indicate that the pace of economic growth has faded to 2.0% in December, albeit closer to 2.5% for the fourth quarter as a whole,” IHS Markit chief economist Chris Williamson commented.
“The surveys reveal greater caution in relation to spending amid uncertainty about the economic outlook, linked in part to growing geopolitical concerns and trade wars(…) Price pressures have meanwhile cooled as lower oil prices feed through, yet rising tariffs remain a concern for many companies, keeping input cost inflation above the survey’s long-run average,” he added.