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United States PMI March 2024

United States: March services PMI shows softening growth amid cost pressures

The S&P Global U.S. Services Purchasing Managers’ Index (PMI) fell to 51.7 in March from 52.3 in February. As a result, the index remained above the 50.0 no-change threshold, but signaled a softer improvement in services sector operating conditions compared to the previous month.

The drop in the PMI was driven by softer expansions in output, new orders and job creation, and a sharper fall in export orders.

Input costs and output prices rose at the sharpest paces in six and eight months respectively in March, often driven by rising wages. These rates of inflation were significantly above pre-pandemic averages. More positively, business sentiment among service providers improved, with 42% of respondents predicting an increase in activity over the coming year.

On the implications for GDP data, Chris Williamson, chief business economist at S&P Global Market Intelligence, said:

“The US service sector reported a further rise in business activity in March, adding to signs that the economy enjoyed robust growth in the first quarter. Combined with an acceleration of growth in the manufacturing sector, the latest services PMI data point to GDP having risen at an approximate 2% annualized rate in the first three months of the year.”

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