Service Sector Shows Continued Growth in December

By at 8 January, 2021, 11:12 am

by Raymond J. Keating-

The Institute for Supply Management’s services index showed that growth continued for the seventh month in a row in December.

The services PMI registered 57.2 percent in December, up by 1.3 percentage points versus November. Anthony Nieves, chairman of the Institute for Supply Management Services Business Survey Committee, noted:

“This reading represents a seventh straight month of growth for the services sector, which has expanded for all but two of the last 131 months.”

A reading above 50 percent indicates that the service sector of our economy is growing.

Fourteen of 18 service industries reported growth in December. The four reported contraction in December were Arts, Entertainment & Recreation; Accommodation & Food Services; the catch-all Other Services; and Real Estate, Rental & Leasing.

Meanwhile, perhaps the most troubling negative was that the employment index moved into negative territory in December. It registered 48.2 percent compared to 51.5 percent in November.

Ten industries reported declines in employment. The four reporting increases in December include: Management of Companies & Support Services; Wholesale Trade; Utilities; and Finance & Insurance.

Acknowledging the concerns regarding employment, the fact that the service sector has grown for seven consecutive months, and that growth accelerated in December, are welcome news, and speak to the resiliency of American entrepreneurs, businesses and workers in these troubled times.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.





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