Economy

December's ISM non-manufacturing index signals better-than-expected expansion

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Key Points
  • The Institute for Supply Management's non-manufacturing index climbed to 55 last month from 53.9 in November.
  • Economists polled by Dow Jones expected the reading to come in at 54.3.
  • The services reading is a stark contrast from ISM's manufacturing index, which fell last month to its lowest level since June 2009. 
Servers fill glasses with water at guest's tables before an event in Washington, D.C.
Andrew Harrer | Bloomberg | Getty Images

Activity in the U.S. services sector rose slightly in December as businesses felt relieved by a partial trade agreement between the U.S. and China, data released Tuesday showed.

The Institute for Supply Management's non-manufacturing index climbed to 55 last month from 53.9 in November. Economists polled by Dow Jones expected the reading to come in at 54.3.

The services reading is a stark contrast from ISM's manufacturing index, which fell last month to its lowest level since June 2009.

"The respondents are positive about the potential resolution on tariffs," Anthony Nieves, chair of The Institute for Supply Management, said in a statement. "However, respondents continue to have difficulty with labor resources."

Employment in the sector decreased slightly last month from November, while prices were unchanged. Business activity, meanwhile, climbed by 5.6 points to 57.2.

China and the U.S. agreed in December to sign a so-called phase one trade deal this month. President Donald Trump later said the agreement would be signed on Jan. 15.

News of the partial resolution lifted sentiment in capital markets and sent U.S. stocks to all-time highs heading into 2020.