US services sector growth slows in March, prices surge
US services sector growth slowed more than expected in March, while prices paid by businesses for their inputs soared, marking a first sign that the conflict in the Middle East is fueling inflationary pressures.
The ISM services index came in at 54.0 last month, down from 56.1 in February, compared to economists’ forecast of a drop to 55.0.
An index above 50 indicates growth in the services sector, which represents more than two-thirds of the US economic activity.
The conflict between the US and Israel on one side, and Iran on the other since late February, has led to a surge in global oil prices, while the average price of gasoline in US gas stations has exceeded $4 a gallon for the first time in over three years.
The ISM index measuring prices paid by businesses for their inputs jumped to 70.7 last month, its highest level since October 2022, compared to 63.0 in February.
On the other hand, the supplier delivery times sub-index rose to 56.2, from 53.9 in February, reflecting longer lead times in factories, with food, beverage, and tobacco manufacturers citing “container delays.”
Meanwhile, the new orders component stood at 60.6, up from 58.6 in February.
(Lucia Mutikani; French version by Diana Mandi©, Edited by Augustin Turpin)
