U.S. Service Sector Growth Slows in December

Politics Reuters

Indian employees at a call centre provide service support to international customers, in the southern city of Bangalore March 17, 2004. The hiring frenzy at call centres in India is the flip side of daily tales pouring out of the US and Britain, ... where thousands of software and back-office jobs are being cut as companies take advantage of cheap communications offshore to drive down costs. India is the undisputed leader of emerging markets to which developed economies are outsourcing high-technology jobs, IT consultancy firm Gartner said in a report released on Wednesday. The $3.6 billion industry in India is seen rocketing to 13.8 billion by 2007 with the number of jobs quadrupling to 1 million. Picture taken March 17, 2004. REUTERS/Sherwin Crasto SC/ (Reuters)

A gauge of growth in the dominant U.S. services sector fell short of expectations for December, hitting a six-month low as indexes on employment, orders and business activity all declined.

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The Institute for Supply Management said on Tuesday its services index fell to 56.2 for December, compared with 59.3 in November. The December figure fell short of the consensus for a 58 reading, according to a Reuters poll.

Two components of the survey, prices and order backlogs, fell below the 50 level that separates expansion from contraction.

Indexes on imports and exports both showed notable declines, while the reading on new orders fell to 58.9, lowest since April.

(Reporting By David Gaffen; Editing by Meredith Mazzilli)

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