US Services Sector Defies Expectations with December Growth

The US services sector displayed surprising strength in December 2025, as the Institute for Supply Management (ISM) reported a rise in its nonmanufacturing Purchasing Managers' Index (PMI) to 54.4. This figure exceeded the economist consensus forecast of 52.3, signaling robust economic momentum as the country steps into 2026. The services sector, representing more than two-thirds of US USeconomic activity, plays a pivotal role in the nation's overall economic health.

The December PMI surge contradicts earlier predictions of a fourth-quarter slowdown, reflecting significant gains in new orders, employment, and export activities. The ISM measure of new orders increased sharply to 57.9 from 52.9 in November, while the employment measure rebounded to 52.0 after six consecutive months of contraction. Export orders also grew following five months of decline, suggesting a revitalization of international demand.