US: S&P Global Services PMI slumps to 44.4 in December vs. 46.8 expected

• S&P Global Services PMI continued to decline in December.
• US Dollar Index stays in negative territory below 104.50.

S&P Global Services PMI declined to 44.4 in December's flash estimate from 46.2 in November. This print fell short of the market expectation of 46.8. Regarding the price pressure in the service sector, "inflationary pressures in the service sector cooled notably in December, as input costs rose at the softest pace since October 2020," said S&P Global. "Despite some material and labor costs rising, reports of lower wholesale and fuel prices eased pressure on cost burdens."

Further details of the publication revealed that the Composite PMI dropped to 44.5 from 46.4 in the same period.

Commenting on the data, "business conditions are worsening as 2022 draws to a close, with a steep fall in the PMI indicative of GDP contracting in the fourth quarter at an annualised rate of around 1.5%," noted Chris Williamson, Chief Business Economist at S&P Global Market Intelligence. 

Market reaction

The US Dollar came under modest selling pressure on this report and the US Dollar Index was last seen posting small daily losses at 104.42.