Dec ISM services index shy of estimate but sector is 'doing fine'

An employee helps a guest at the Waldorf Astoria in New York City.
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An employee helps a guest at the Waldorf Astoria in New York City.

The Institute for Supply Management services index fell more than expected in December, to the lowest figure since June.

The ISM non-manufacturing index hit 56.2 in December, versus the 58.5 estimate, based on analysts polled by Thomson Reuters. In November, the index figure came out to 59.3.

Despite the miss in estimate, December's reading indicates that the non-manufacturing sector grew for the 59th consecutive month and "the non-manufacturing part of the economy is doing fine," Ryan Sweet, senior economist at Moody's Analytics.

The index measures the growth of economic activity in the U.S. services sector. A figure above 50 indicates expansion in economic activity.

The fall in the services composite may seem at odds with lower energy prices—generally viewed as a boost to the non-manufacturing economy—but the ISM index is "not overly sensitive to fluctuations in oil prices," said Sweet.

Read More US services sector activity growth slowest since Feb: Markit

Several aspects of the index grew at a slower rate in December: the business activity component of the index decreased to 57.2 from November's reading of 64.4 and the new orders index registered 58.9 last month, from 61.4 in November. The employment aspect of the index, which decreased to 56 from 56.7 in November, signals weaker hiring in December.

The prices index read 49.5 from 54.4 in November, which suggests that "disinflationary pressures are intensifying because of lower commodity prices," Sweet said.