ISM Survey Shows Sharp Drop in Services Sector Employment Despite Growth Pickup
• December ISM non-manufacturing PMI employment component plunged to 43.3, well into contraction territory and far below expectations
• Level not seen outside of crises like COVID and Great Recession; even lower than 2001 recession
• Signals potential moderation in broader labor market despite strong December jobs report
• Survey comments suggest labor weakness partially supply-related but also seeing some layoffs to reduce costs
• ISM business activity index rose to 3-month high even as employment index fell, suggesting continued growth