U.S. Service Economy Expands as ISM’s December Index Rises to 52.6 from 52

Service industries in the U.S. expanded less than forecast in December, indicating improvement in the economy will be uneven. The Institute for Supply Management’s index (NAPMNMI) of non- manufacturing industries, which account for almost 90 percent of the economy, rose to 52.6 last month from 52 in November, the Tempe, Arizona-based group said today. The median forecast of economists surveyed by Bloomberg News called for an increase to 53. Fifty is the dividing line between expansion and contraction. Slow wage growth, limited job gains and depressed real estate values may make it tougher for Americans to boost their spending after the holiday shopping season. The figures stand in contrast to recent data showing declining claims for jobless benefits and the strongest pace of manufacturing in six months. The survey’s employment gauge rose to 49.4 in December from 48.9. The measure of new orders was little changed at 53.2 after 53 in November. A gauge of business activity held at 56.2. The index of prices paid decreased to 61.2 from 62.5.