US: Markit Services PMI drops to 54.8 in December vs. 55.3 expected

• Service sector in US lost momentum in December.
• US Dollar Index clings to small daily gains near mid-89s.

The economic activity in the US' service sector expanded at a softer pace in December than it did in November with the IHS Markit Services PMI retreating to 54.8 from 58.4. This reading came in lower than the flash estimate and the market expectation of 55.3.

Further details of the publication revealed that the Composite PMI fell to its lowest level in three months at 55.3 from 58.6.

Commenting on the data, "rising virus case numbers took an increasing toll on the US economy in December, with business activity, order books and employment all growing at much-reduced rates," said Chris Williamson, Chief Business Economist at IHS Markit. "The slowdown was especially steep in the service sector, where stricter social distancing measures hit consumer-facing businesses in particular." 

Market reaction

The US Dollar Index largely ignored this report and was last seen posting modest daily gains at 89.55.