The Institute for Supply Management (ISM) reported on Thursday that its non-manufacturing index (NMI) came in at 57.2 in December, which was 1.3 percentage point higher than the November reading of 55.9 percent. The reading pointed to the growth in the services sector for the seventh straight month and at the fastest pace in three months.

Economists forecast the index to decrease to 54.6 last month. A reading above 50 signals expansion, while a reading below 50 indicates contraction.

Of the 18 manufacturing industries, 14 reported gains last month, the ISM said but added that respondents' comments were mixed about business conditions and the economy as various local- and state-level COVID-19 shutdowns continued to negatively impact companies and industries.

According to the report, the ISM’s non-manufacturing Business Activity measure rose 1.4 percentage points to 59.4 percent from November’s figure, the New Orders gauge increased 1.3 percentage points to 58.5 percent, the Supplier Deliveries Index jumped 5.8 percentage points to 62.8 percent and the Inventories index surged 8.9 percentage points to 58.2 percent. Meanwhile, the Employment Index decreased 3.3 percentage points to 48.2 percent from the November reading and the Prices Index fell 1.3 percentage points to 64.8.

Commenting on the data, the Chair of the ISM Non-Manufacturing Business Survey Committee, Anthony Nieves, noted, “The past relationship between the Services PMI and the overall economy indicates that the Services PM for December (57.2 percent) corresponds to a 2.9-percent increase in real gross domestic product (GDP) on an annualized basis.”