Index of activity in service industries likely to hold steady in January

Markets Associated Press

The Institute for Supply Management, a trade group of purchasing managers, issues its index of non-manufacturing activity for January. The report will be released Wednesday at 10 a.m. Eastern.

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UNCHANGED READING: The expectation is that the index held steady at 56.5 last month, according to a survey of economists by data firm FactSet.

SLOWER PACE: In December, U.S. service firms expanded at a solid but slower pace from November, when the index was close to the eight-year high that had been hit in August.

The ISM reported Monday that its index for manufacturing fell to 53.5 in January, the third straight drop, pushing the gauge of factory activity to its slowest pace in a year.

The ISM is a trade group of purchasing managers. Its survey of services firms covers businesses that employ 90 percent of the American workforce, including retail, construction, health care and financial services companies.

The economy grew at an annual rate of 2.6 percent in the October-December quarter after growing at a sizzling 5 percent rate in the summer.

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Economists believe that strong employment gains and rising consumer spending will support solid growth of around 3 percent in 2015, which would be the best annual gain in a decade.