Wall Street Journal (01/06/16) Josh Mitchell

The U.S. service sector in December grew at the slowest pace in more than a year and a half, although underlying signs suggest stable economic growth, according to the Institute for Supply Management. The ISM’s nonmanufacturing purchasing manager’s index fell from 55.9 in November to 55.3 in December. A reading above 50 signals expansion.

December’s slowdown was likely temporary, reflecting holiday-related factors, says Anthony Nieves, the leader of the ISM survey. One of the key components of the index, supplier deliveries, rose in the fall as service companies prepped for holiday activity, but deliveries declined sharply in December. Other key components of the index—measuring output, new orders, and hiring—all rose in December.

“For the most part it’s been steady, incremental growth, and all indications are it’s going to stay on that path,” Nieves says. Some private-sector economists say the economy grew at about a 1% annual pace in the fourth quarter of 2015, down from 2% in the third quarter.