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WASHINGTON (AP) — The Institute for Supply Management reports on December growth at U.S. service firms at 10 a.m. Eastern Wednesday.
NEARLY UNCHANGED: Economists expect the ISM services index dipped slightly last month to 55.8 from 55.9 in November, according to a survey by the data firm FactSet. Any reading over 50 signals that services firms are expanding.
The ISM is a trade group of purchasing managers. Its services survey covers businesses that employ the vast majority of workers, including retail, construction, health care and financial services companies.
U.S. consumers are becoming financially healthier, likely helping much of the services sector continue its nearly six year rebound after declining sharply during the Great Recession. Solid hiring over the past year has improved many Americans' economy security, while low oil and gasoline prices have given family budgets a bit more leeway.
Unemployment held at a stable 5 percent in November for the second straight month, down from 5.8 percent a year earlier. Employers have added 2.6 million jobs in the past 12 months, with nearly 90 percent of the jobs coming from the services sector as auto sales have hit record highs and spending at restaurants has surged.
Consumers have also been helped by gas costing an average of $1.99 a gallon, a 9.5 percent decline from a year ago. The Energy Department estimated in December that U.S. households saved an average of $660 on gas last year.
Still, the U.S. economy is finding headwinds abroad that have slowed growth. China is settling uneasily into a slowdown, while European growth has been grinding away and emerging economies such as Brazil and Russia are confronting severe downturn.
The U.S. services index is expected to show growth at its slowest pace since May's reading of 55.7.
But factory activity is suffering the most from the worldwide turmoil.
U.S. manufacturers contracted in December as new orders and hiring prospects dimmed, the ISM reported Monday. Its index of factory activity fell to 48.2 from 48.6 in November.
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