US service sector activity accelerated in December, but an index measuring input prices soared to a two-year high, indicating a rise in inflation. This is in line with the Fed's estimate that interest rates will be cut less this year. The American Association for Supply Management said on Tuesday that due to strong demand, its non-manufacturing PMI rose from 52.1 in November to 54.1 last month, exceeding market expectations of 53.3. So-called hard data, including consumer spending, shows that the US economy performed steadily in the fourth quarter. According to ISM data last week, the manufacturing PMI rose to a 9-month high in December. The new orders index rose to 54.2 from 53.7 in November. The business activity index rose to 58.2 from 53.7 last month. As demand rises, so do investment costs. The non-manufacturing price index jumped to 64.4 from 58.2 in November, the highest level since February 2023. The employment index was 51.4, with little change.

US service sector activity accelerated in December, but an index measuring input prices soared to a two-year high, indicating a rise in inflation. This is in line with the Fed's estimate that interest rates will be cut less this year. The American Association for Supply Management said on Tuesday that due to strong demand, its non-manufacturing PMI rose from 52.1 in November to 54.1 last month, exceeding market expectations of 53.3. So-called hard data, including consumer spending, shows that the US economy performed steadily in the fourth quarter. According to ISM data last week, the manufacturing PMI rose to a 9-month high in December. The new orders index rose to 54.2 from 53.7 in November. The business activity index rose to 58.2 from 53.7 last month. As demand rises, so do investment costs. The non-manufacturing price index jumped to 64.4 from 58.2 in November, the highest level since February 2023. The employment index was 51.4, with little change.