U.S. services sector grows for seventh consecutive month

By Matt Ott, The Associated Press | January 7, 2021 | Last updated on January 7, 2021
1 min read
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The U.S. services sector, where most Americans work, grew for the seventh consecutive month in December even as coronavirus cases surged through the holidays.

The Institute for Supply Management reported Thursday that its index of services activity grew slightly to a reading of 57.2 last month, from a reading of 55.9 in November. Readings above 50 represent expansion in services industries such as restaurants and bars, retail stores and delivery companies.

Respondents to the December ISM survey continued to express anxiety about the ongoing ramifications of Covid-19. On Wednesday, the U.S. recorded nearly 4,000 Covid-19 deaths in a single day, the most ever.

Thursday’s report showed that business activity and new orders both grew more quickly but the index measuring employment fell into contraction. On Thursday, the Labor Department reported that the number of Americans seeking unemployment each week continues to hover close to 800,000.

Out of the 18 service sector categories, 14 reported growth in December, including management and support services, wholesale and retail trade, healthcare, and transportation and warehousing. Industries reporting contraction in December were arts, entertainment and recreation, accommodation and food services and real estate rental and leasing.

Restaurants and anything to do with entertainment, travel and leisure have been among the hardest hit as the pandemic grinds on into its tenth month.

The services sector had been growing for 122 consecutive months — more than a decade — before contracting in April and May as the coronavirus outbreak forced many businesses to close and people to stay home.

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Matt Ott, The Associated Press

Matt Ott is a reporter with The Associated Press,  an American not-for-profit news agency headquartered in New York City and founded in 1846.