Markit Economics Reports Weak U.S. Economic Growth In December

Markit Economics issued its Purchasing Managers’ Index Tuesday which highlighted declining growth in December.

“The US economy lost significant growth momentum at the close of the year. Excluding the drop in activity caused by the October 2013 government shutdown, the manufacturing and service sector PMIs collectively signalled the weakest expansion since the end of 2012. This is also not just a one-month wobble: the pace of growth has now slowed for six consecutive months,” according to Markit Chief Economist Chris Williamson.

The report indicated that “U.S. service providers remained in expansion mode at the end of 2014, but rates of output and new business growth moderated further from the post-crisis peaks seen earlier in the year. A slowdown in output growth contributed to the weakest rise in service sector payroll numbers for eight months in December.”

The Markit U.S. Services Business Activity Index “pointed to the slowest expansion of U.S. private sector business activity for 14 months. The moderation in output growth reflected weaker contributions from both the manufacturing and service sectors in December.”

While payroll numbers did increase, “the rate of employment growth was only marginal in December and the weakest for eight months.”

Williamson concluded on a positive note and cited lower oil prices helping to “foster stronger economic growth as we move into 2015, by reducing the fuel bills of households and companies. Measured across both sectors, input costs showed the smallest rise since April 2013 in December. Lower prices will also of course provide added leeway for interest rates to remain on hold for longer.”