US service sector surprises with December growth

Business Jan 07, 2026

The US services sector, which powers most of the country's economy, pulled off a surprise in December 2025—growing when experts thought it might slow down.
The key PMI number jumped to 54.4 (up from 52.6), and hiring bounced back after months of declines, while new orders increased.
It's a welcome sign that demand is picking up again.

Still some hurdles: inflation and supply chain issues

Export orders are finally rising too, but there's a catch: backlog orders keep shrinking.
And while business is up, inflation isn't letting go—prices are still much higher than the Federal Reserve would like.
Even so, with tax cuts and fading trade policy uncertainty expected in 2026 under President Trump, the outlook for economic growth is looking brighter overall.