US services firms grew at a faster pace last month

Business News

FILE – In this Nov. 27, 2019, file photo Dan Villegas stocks items in preparation for a holiday sale at a Walmart Supercenter in Las Vegas. On Tuesday, Jan. 7, 2020, the Institute for Supply Management, a trade group of purchasing managers, issues its index of non-manufacturing activity for December. (AP Photo/John Locher, File)

WASHINGTON (AP) — U.S. services companies grew more quickly in December than the previous month, a sign that the economy’s steady expansion should continue.

The Institute for Supply Management said Tuesday that its service-sector index rose to 55, from 53.9 in November. Any reading above 50 signals an expansion.

The index covers retail, health care, hotels and restaurants, and professional services, among other sectors. Services firms added jobs last month but at a slightly slower pace than in November, while sales jumped in a sign of consumers’ health.

Steady consumer spending, buoyed by a strong job market and decent pay gains, is driving a healthy service sector and broader economy. A separate survey of manufacturers by the ISM showed that factories are still struggling with trade fights and feeble global growth, but the industries covered by the ISM’s services survey make up nearly 90% of the economy.

Most analysts predict that growth remained solid in the final three months of the year, with the economy expanding at roughly a 2.5% annual rate. That’s up from 2.1% in the July-September quarter.

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