Following the crash in Manufacturing, Markit reported America's Services economy massively missed expectations and plunged to 53.7, lowest since Dec 2014. New orders plunged to the lowest since January 2015 and employment tumbled. As Markit reports, this is "disappointing  news  for  an  economy which  has  seen the first  US  interest  rate  hike  for almost  a  decade." 

Commenting on the flash PMI  data, Chris Williamson, chief economist at Markit said:

"A lack  of  inflationary  pressures,  slowing  growth and a drop  in  business  confidence to  a  five-year low are  all disappointing  news  for  an  economy which  has  seen the first  US  interest  rate  hike  for almost  a  decade. The Fed projections  point  to  a further  four  quarter  point  hikes in  2016,  ut  with  data as weak as these, we're likely to see a far less aggressive rate hike progression.

The    survey    data    are    consistent    with    gross domestic  product  rising  at  an  annualised  rate  of 1.8% in the fourth quarter. That's down only slightly from  the  2.1%  pace  observed  in  the  third  quarter, but   the   survey   shows   a   more   severe   slowing towards  the  end  of  the  fourth  quarter,  with  an annualised  GDP  growth  rate  of  just  1.4%  indicated for December alone.

Hiring remained encouragingly resilient  in the face  of  the  weaker  growth  trend, pointing to  a  non-farm payroll   increase   of   170,000. That's  below the average  of  201,000  signalled  in  the  preceding  11 months  of  the  year  (and  below  the  official  year-to-date average of 210,000), but still strong.