WASHINGTON, Jan.6 (Reuters) – Activity in the U.S. service sector slowed more than expected in December, possibly dampened by a resurgence in COVID-19 infections, but bottlenecks appear to be easing.

The Institute for Supply Management said Thursday that its non-manufacturing activity index fell to 62.0 last month from 69.1 in November, which was the highest reading since the series began in 1997.

A reading above 50 indicates growth in the service sector, which accounts for more than two-thirds of US economic activity. Economists polled by Reuters expected the index to fall to 66.9.

The United States has been hit hard by a winter wave of coronavirus cases, fueled by the Omicron variant. Air travel has been severely disrupted. Although businesses have not been closed, services have been cut back as workers become ill or have to self-isolate.

The ISM measure of new orders received by service companies fell to 61.5, the lowest in 10 months, from a record 69.7 in November.

With stocks sentiment still subdued, a rebound is likely once the current wave of coronavirus infections subsides.

The surge in cases also likely slowed hiring in service industries last month. The survey’s measure of service sector employment fell to 54.9 from a seven-month high of 56.5 in November.

But there are some tentative signs that the supply stalemate in the service sector is starting to break down. The survey’s supplier delivery measure fell to 63.9 from 75.7 in November. A reading above 50% indicates slower deliveries.

The improvement reflects the findings of the ISM manufacturing survey released on Tuesday. Most manufacturers expressed optimism that the worst supply constraint, which spurred inflation, was likely behind.

Even as supply improves, service companies continue to pay higher prices for inputs. The measure of prices paid by the ISM’s service industries was little changed at 82.5 in December. (Report by Lucia Mutikani edited by Chizu Nomiyama)