The U.S. services sector activity held steady in November, with employment still subdued and prices for inputs elevated, a survey showed Wednesday.

The Institute for Supply Management said its nonmanufacturing purchasing managers index was little changed at 52.6 last month from 52.4 in October. Economists polled by Reuters had forecast the services PMI slipping to 52.1.

The services sector accounts for more than two-thirds of U.S. economic activity. The PMI suggested economic activity was on a firmer footing halfway through the fourth quarter.

Economists say activity is being driven by higher-income households, though recent stock market volatility could curtail their spending.

Lower-income households have been disproportionately impacted by higher prices, mostly from import tariffs, creating what economists have called a K-shaped economy. This phenomenon has been evident in consumer sentiment surveys.

The government will publish its delayed initial estimate of gross domestic product for the third quarter later this month. The Atlanta Federal Reserve estimates GDP increased at a 3.9% annualized rate in the third quarter. The economy grew at a 3.8% pace in the April-June quarter.

BACKLOG ORDERS EYE RECOVERY

The ISM survey's measure of new orders received by services businesses dropped to 52.9 in November from 56.2 in the prior month. Backlog orders remained weak, though the pace of decline slowed considerably.

Prices paid by services businesses for inputs cooled to still-high levels, indicating inflation could remain above the Federal Reserve's 2% target for some time. U.S. central bank officials will meet next week to decide on interest rates.

As many as five of the 12 voting policymakers on the central bank's rate-setting Federal Open Market Committee have voiced opposition to or skepticism about cutting rates further, while a core of three members of the Washington-based Board of Governors wants rates to fall. The ISM's measure of prices paid by businesses fell to a still-elevated 65.4 from 70.0 in October. Services employment improved, likely reflecting holiday hiring.

Overall, employers remain hesitant to boost hiring amid lingering uncertainty stemming from tariffs and the integration of artificial intelligence for some job roles, economists say.

The ISM previously noted that some businesses had reported they "have not replaced employees who have left through attrition."

The survey's gauge of services sector employment rose to 48.9 from 48.2 in October. It has now contracted for six consecutive months.

A reduction in supply because of raids on undocumented immigrants is also restraining the labor market. A survey from the Conference Board last month showed consumers' perceptions of the labor market worsened in November.