Activity in the US services sector cooled further last month, according to survey data published Wednesday, as new orders slowed and employment in the sector contracted.
The services index of the Institute for Supply Management (ISM) continued its recent decline, slipping to 51.4 percent in March, 1.2 percentage points lower than in February.
The services data came in below market expectations, according to Briefing.com, but still it remained above the 50-point mark separating growth from contraction in the sector for the 15th month in a row.
“The decrease in the rate of growth in March and the decline in the composite index is a result of slower new orders growth, faster supplier deliveries and a contraction in employment,” ISM survey chair Anthony Nieves said in a statement.
“Respondents indicated continuing improvement in logistics and the supply chain,” he continued, adding: “Employment challenges remain a combination of difficulties in backfilling positions and/or controlling labor expenses.”
The ISM’s prices index fell by 5.2 percentage points from a month earlier to 53.4 percent, marking its lowest reading since March 2020, Fiore said.
“However, respondents indicated that even with some prices stabilizing, inflation is still a concern,” he added.
The services index figures arrived two days after the ISM’s manufacturing index returned to growth for the first time since September 2022.
The March reading of 50.3 percent was sharply above February’s figure of 47.8 percent, and was above market expectations of continued contraction, according to Briefing.com.
