The Institute for Supply Management (ISM) reported its non-manufacturing index (NMI) came in at 56.7 in January, which was 1.3 percentage points lower than the December 2018 reading of 58.0 percent. This pointed to continued growth in the non-manufacturing sector at a slower rate.

Economists forecast the index to decrease to 57.2 last month. A reading above 50 signals expansion, while a reading below 50 indicates contraction.

Of the 18 manufacturing industries, 11 reported growth last month, the ISM said.

According to the report, the ISM’s non-manufacturing business activity measure dropped to 59.7 percent, 1.5 percentage points lower than the December reading of 61.2 percent. That reflected growth for the 114th consecutive month, at a slower pace in January. The new orders gauge decreased to 57.7 percent, 5 percentage points lower than the reading of 62.7 percent in December. Meanwhile, the employment indicator rose 1.2 percentage points in January to 57.8 percent from the December reading of 56.6 percent. The Prices Index increased 1.4 percentage points from the December reading of 58 percent to 59.4 percent, indicating that prices increased in January for the 20th consecutive month.

Commenting on the data, the Chair of the ISM Non-Manufacturing Business Survey Committee, Anthony Nieves, noted, "The past relationship between the NMI and the overall economy indicates that the NMI for January (56.7 percent) corresponds to a 2.8-percent increase in real gross domestic product (GDP) on an annualized basis.”