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Economic Contraction · Inflation · Services PMI · US Economy
The US S&P Global Services PMI reported a sharp slowdown in business activity in March, falling to 49.8 from 51.7 in February, marking the first contraction since January 2023 and the lowest reading in over three years, according to S&P Global.
This downturn, attributed to higher inflation, surging energy costs, and the war in the Middle East, indicates worsening affordability for consumers. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated that the service sector's contraction has dragged the overall US economy to a near-stalled 0.5% annualized growth rate in March.
Consumer-facing service sectors are experiencing one of the steepest downturns since data collection began in 2009, excluding pandemic lockdowns. Input cost inflation continues above trend, with prices rising to the greatest degree so far in 2026.
Despite these economic headwinds, the US Dollar (USD) remains steady, showing modest gains against major currencies, with the US Dollar Index (DXY) trading above 100.00 following the Nonfarm Payrolls report.
US Services Sector Contracts First Time Since 2023(current)
