The Institute for Supply Management (ISM) said its index of non-manufacturing activity fell to 55.3 from 55.9 the month before. The reading, the lowest since April 2014, was just below expectations of 56.0 from a Reuters poll of 67 economists.
A reading above 50 indicates expansion in the service sector and a reading below 50 indicates contraction.
The business activity index rose to 58.7 from 58.2 the month before. That was just above expectations of 58.4
The employment index rose to 55.7 from 55.0 a month earlier. New orders climbed to 58.2 from 57.5. The prices paid index fell to 49.7 from 50.3.
The U.S. economy's manufacturing sector contracted further in December, according to an earlier ISM report.
(Editing by Meredith Mazzilli)
