U.S. services PMI fall in December; job creation accelerates fastest since September 2015

Growth in service sector activity eased during the month of December, while job creation accelerated at the fastest pace in near 16 months, highlighting a sustained upturn in business activity and incoming new work across the U.S. service sector. Greater workloads and improved confidence towards the business outlook, in turn, contributed to the fastest rise in payroll numbers since September 2015.

At 53.9 in December, the seasonally adjusted Markit final U.S. Services Business Activity Index dropped from 54.6 in November to signal the slowest upturn in service sector activity for three months. Nonetheless, the latest reading was well above the neutral 50.0 threshold and pointed to a solid pace of expansion. Moreover, the average reading during the final quarter of 2016 (54.4) was the strongest since Q4 2015.

Service providers reported a robust and accelerated upturn in payroll numbers at the end of the year. The rate of job creation was the fastest since late-2015, which survey respondents linked to ongoing expansion plans and rising confidence regarding the business outlook.

December data signaled a further rebound in business optimism from the post-crisis low seen in June, and the latest reading was one of the highest recorded since the summer of 2015. A number of firms also pointed to increased food costs. Latest data indicated a solid rise in average prices charged by service providers and the rate of inflation was the steepest recorded since June 2015.

Meanwhile, the dollar index traded at 101.58, up 0.06 percent, while at 4:00GMT, the FxWirePro's Hourly Dollar Strength Index remained slightly bearish at -86.94 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex