In December, service industry activity in the USA accelerated, but an index measuring input prices surged to its highest level in nearly two years, indicating rising inflation, which aligns with the Federal Reserve's forecast of smaller rate cuts this year. The Institute for Supply Management (ISM) stated on Tuesday that due to strong demand, the non-manufacturing PMI rose from 52.1 in November to 54.1 last month, exceeding the market expectation of 53.3. The so-called hard data, including Consumer spending, indicates that the USA economy performed robustly in the fourth quarter. Last week, ISM data revealed that the manufacturing PMI in December reached a nine-month high. The new order index rose from 53.7 in November to 54.2. The business activity index increased from 53.7 last month to 58.2. With rising demand, input costs are also increasing. The non-manufacturing price index soared from 58.2 in November to 64.4, the highest level since February 2023. The employment index stands at 51.4, showing little change.