US services sector grows as job picture improves

THE rate of job losses at US private employers slowed in December and the services sector showed marginal growth, according to data published yesterday.

The Institute for Supply Management said its services index rose to 50.1 in December, just above the 50 mark separating expansion from contraction. Meanwhile, ADP Employment Services data showed the rate of private sector job losses slowed in the same month with 84,000 jobs lost in December, compared to 145,000 in November.

However, in both cases the data was worse than economists had expected, underlining the tentative nature of the US’ economic recovery.

“The service sector... has been treading water since September,” said Dan Greenhaus, chief economic strategist at Miller Tabak & Co. “Further improvement in this indicator and this sector is crucial for broader economic improvement.”

The ADP numbers did not change expectations for the outcome of the closely watched US government non-farm payroll report this Friday. Economists still expect a loss of 8,000 non-farm jobs after a surprisingly small total of 11,000 job losses in November.