Investing.com - Service sector activity in the U.S. grew at the slowest pace in almost two years in December, dampening optimism over the health of the economy, industry data showed on Wednesday.
In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index fell 55.3 last month from 55.9 in November, missing forecasts for a reading of 56.0.
The Non-Manufacturing Business Activity Index increased to 58.7, which is 0.5 points higher than the November reading of 58.2. The New Orders Index registered 58.2, 0.7 points higher than the reading of 57.5 in November.
The Employment Index increased 0.7 points to 55.7 from the November reading of 55.0, while the Prices Index decreased 0.6 points from the November reading of 50.3 to 49.7.
On the index, a reading above 50.0 indicates the non-manufacturing sector economy is generally expanding, below 50.0 indicates the sector is contracting.
According to the NMI, 11 non-manufacturing industries reported growth in December. Faster deliveries in December contributed to the overall slight slowing in the rate of growth according to the NMI composite index. All of the other component indexes increased in the month of December.
The majority of respondents’ comments remain positive about business conditions and the overall economy.
EUR/USD was trading at 1.0752 from around 1.0756 ahead of the release of the data, GBP/USD was at 1.4639 from 1.4640 earlier, while USD/JPY was at 118.66 compared to 118.58 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 99.48, compared to 99.46 ahead of the report.
Meanwhile, U.S. stock markets were sharply lower after the open. The Dow 30 shed 1.2%, the S&P 500 dropped 1.2%, while the Nasdaq Composite slumped 1.1%.
Elsewhere, in the commodities market, gold futures traded at $1,090.70 a troy ounce, compared to $1,090.00 ahead of the data, while crude oil traded at $34.84 a barrel from $34.86 earlier.