Investing.com - Service sector activity in the U.S. fell more than expected in December, dampening optimism over the American economy, industry data showed on Friday.
In a report, the Institute of Supply Management (ISM) said its non-manufacturing purchasing manager's index (PMI) decreased to 55.9 in December from the prior month’s reading of 57.4.
Analysts had expected the index to drop to only 57.8 last month.
On the index, a reading above 50.0 indicates the non-manufacturing sector economy is generally expanding, below 50.0 indicates the sector is contracting.
The numbers show that the sector is growing at a slower rate, said Anthony Nieves, chair of the Institute for Supply Management Non-Manufacturing Business Survey Committee.
"There has been a second consecutive month of pullback in the rate of growth," he said. "Overall, the majority of respondents’ comments indicate that they finished the year on a positive note. They also indicate optimism for business conditions and the economic outlook going forward."
The Non-Manufacturing Business Activity Index decreased to 57.3 last month, 4.1 points below November’s reading of 61/4 and also below the consensus forecast of 61.0.
The New Orders Index registered 54.3 in December, lower than the reading of 58.7 in the previous month.
The Employment Index rose to 56.3 last month from November’s reading of 55.3.
The Prices Index inched forward to 60.8 in December from the prior month’s reading of 60.7.
Following the report,the U.S. dollar index, which tracks the greenback against a basket of six major rivals, was trading at 91.79 from 91.80 earlier.
Meanwhile, U.S. stock markets rose after the open. The S&P 500 rose six points or 0.35% while the Dow composite increased 62 points or 0.25% to 25,060.88 and tech heavy NASDAQ Composite was up 25 points or 0.36%.