Service Sector Activity Dips Slightly in March

The United States' service sector experienced a modest decrease in activity this March, with the Services Purchasing Managers' Index (PMI) falling from January's 53.5% to 50.8%. Despite this dip, the sector remains in expansion territory, according to the latest report from the Institute for Supply Management (ISM).

Key Indexes Show Mixed Signals

While the New Orders Index saw a decline of 1.8 percentage points to 50.4%, the Inventory Sentiment Index and the Business Activity Index both showed positive movements, rising to 56.6% and 55.9% respectively. However, the Employment Index took a significant hit, dropping 7.7 percentage points into contraction at 46.2%.

Tariff Impacts and Sentiment Balance

"This month, we've observed a notable increase in reports of cost escalations due to tariff activities," stated Steve Miller, Chair of the ISM Services Business Survey Committee. He added, "Despite concerns over potential tariffs and reduced government spending, there remains a delicate balance in near-term sentiment among respondents."