A U.S. services gauge unexpectedly shrank at the end of 2022, with steep declines in measures of business activity and orders that, if sustained, risk heightening concerns about the demand outlook.

A measure of U.S. service providers pulled back abruptly in December after soaring to a record a month earlier, reflecting more moderate growth in business activity and orders.

SILVER SPRING, Md. — The U.S. services sector, where most Americans work, registered its fifth consecutive month of expansion in October.