(Washington) Activity in the services sector in the United States continued to slow down in March, more than anticipated by the markets, in particular due to a slowdown on the price front, according to the monthly survey published Wednesday by the professional federation ISM.
The index measuring this activity fell to 51.4%, compared to 52.6% in February, below the forecasts of analysts, who rather expected a stabilized index, according to the consensus published by briefing.com.
“The services index slowed unexpectedly, for the second month in a row and to its lowest level since the start of the year. Even if the sector continues to grow, it does so at a less and less marked rate,” said HFE chief economist Rubeela Farooqi in a note.
Activity therefore continued to progress in February, but at a pace which has continued to slow down since the start of the year, since the index is above 50%. An index below 50%, on the other hand, means that activity is contracting, which has only happened once for the services sector since June 2020-in December 2022.
“The slowdown in March and the decline in the composite index are the result of a slowdown in growth in new orders, deliveries by intermediaries and a drop in employment,” underlined the head of the survey , Anthony Nieves, quoted in the press release.
Among the sixteen service industries studied, twelve remain growing, but four are now declining, including the real estate and rental sector, whose rising prices also remained a significant component of inflation in recent months.
The most marked slowdown among the sub-indexes concerns that of prices, which fell from 58.6% in February to 53.4% in March.
A movement particularly monitored by the markets, while the rise in prices in the services sector is now the main component of inflation in the United States and the one which slows down the return of the latter towards the 2% target, aimed by the Federal Reserve (Fed).