The services PMI ends December at 45.0, extending a run of mid-to-high 40 readings going back to July. This is contraction territory that hasn't played out yet in the actual services economy and especially contrasts with the rival ISM services index which has been easily gliding in the sweet mid-50s range all along. Today's results will have no impact on expectations for tomorrow's ISM update where another very healthy reading is expected.

The PMI services sample is reporting weak demand and declining output, tied the report says to general uncertainty and high interest rates. The sample's expectations are described as"muted". A special note in the report is a decline in inflation, with readings for both costs and selling prices at two-year lows.

Contraction is the call for the PMI service's December final, at a consensus 44.4, unchanged from the mid-month report.

US Services Purchasing Managers' Index (PMI) is based on monthly questionnaire surveys collected from over 400 U.S. companies which provide a leading indication of what is happening in the private sector services economy. It is seasonally adjusted and is calculated from seven components, including New Business, Employment and Business Expectations.

Investors need to keep their fingers on the pulse of the economy because it indicates how various types of investments will perform. The Markit Services PMI provides advance insight into the services sector, which gives investors a better understanding of business conditions and valuable information about the economic backdrop of various markets. The stock market likes to see healthy economic growth which generally translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures. The PMI data are also used by many Central Banks to help make interest rate decisions.

The IHS Markit Services Flash data give a detailed look at the services sector, the pace of growth and the direction of this sector. Since the service sector accounts for more than three-quarters of U.S. GDP, this report has a significant influence on the markets. In addition, its sub-indexes provide a picture of new business, employment, business expectations and prices.