U.S. Service Sector Growth Slows in March Amid Rising Costs

The U.S. service sector experienced a slowdown in growth in March, with employment seeing its largest decline since the beginning of 2023. According to Odaily, data released on Monday indicates that the Institute for Supply Management's (ISM) services price index rose to 70.7, marking its highest level since October 2022 and reflecting a 7.7 percentage point increase from the previous month, the largest rise in nearly 14 years. The ISM services index fell by 2.1 percentage points to 54, primarily due to weakened employment and slower business activity growth. The ongoing conflict in Iran has significantly increased energy and other input costs, putting pressure on businesses. The services employment index dropped by 6.6 percentage points to 45.2, one of the largest monthly declines since the COVID-19 pandemic. The business activity index decreased by 6 percentage points to 53.9, the largest drop since mid-2024. Meanwhile, the supplier deliveries index reached its highest level since October 2024. New orders for service providers saw their strongest growth in over three years.