US Services PMI Tanks for First Time Since 2023 – Is a Market Shake-Up Just Around the Corner?
Ever feel like the service sector’s throwing a curveball just when you thought things were stabilizing? The latest US S&P Global Services PMI for March shows exactly that—business activity dipped into contraction territory for the first time since January 2023. With the index dropping from 51.7 in February to 49.8, we’re looking at the lowest reading in over three years, signaling a subtle but serious pullback. Why? A cocktail of soaring inflation, spiking energy costs, and the unsettling backdrop of the Middle East conflict is squeezing the sector hard. Chris Williamson hits the nail on the head, pointing out how consumer-facing services are bearing the brunt of this slowdown, reminiscent of some of the sharpest downturns since 2009. What does it mean for the everyday spender and the broader economy? Well, it’s a wake-up call about affordability tightening its grip while prices keep climbing. Meanwhile, the US Dollar keeps its cool post-Nonfarm Payrolls, inching up modestly but steady. Curious how these shifts might ripple through your investments or business plans? Dive deeper into the unfolding story. LEARN MORE.
The US S&P Global Services PMI in March reported that business activity in the sector is slowing sharply, falling to contractionary territory for the first time since January 2023, amid higher inflation and the war in the Middle East.
The index fell from 51.7 in February to 49.8, according to S&P. They noted that, “Overall, it was the lowest index reading for over three years and consistent with a fractional contraction in activity.”
Rising input prices due to the surge in energy costs are one of the reasons that are weighing on the services sector, as the report read, “the latest price data signaled the continuation of above trend input cost inflation, with prices overall rising to the greatest degree so far in 2026.”
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, wrote, “The service sector has slipped into contraction for the first time since January 2023, dragging the overall economy down to a near-stalled 0.5% annualized rate of growth in March. Worst hit is consumer-facing service sectors where, barring the pandemic lockdowns, the downturn reported in March was among the steepest recorded since data were first available in 2009.”
He added that the “Key to the deteriorating growth trend is a pull-back in spending amid worsening affordability, with costs and selling prices surging higher in March amid spiking energy prices.”
Market reaction to Nonfarm Payrolls data
The US Dollar (USD) remains steady after its modest rise following the Nonfarm Payrolls report, with the US Dollar Index (DXY) trading with modest gains above 100.00.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.10% | 0.09% | -0.03% | 0.18% | 0.08% | 0.33% | 0.07% | |
| EUR | -0.10% | 0.03% | -0.11% | 0.08% | 0.09% | 0.21% | -0.03% | |
| GBP | -0.09% | -0.03% | -0.13% | 0.06% | 0.08% | 0.19% | -0.06% | |
| JPY | 0.03% | 0.11% | 0.13% | 0.21% | 0.21% | 0.33% | 0.07% | |
| CAD | -0.18% | -0.08% | -0.06% | -0.21% | 0.02% | 0.14% | -0.12% | |
| AUD | -0.08% | -0.09% | -0.08% | -0.21% | -0.02% | 0.11% | -0.14% | |
| NZD | -0.33% | -0.21% | -0.19% | -0.33% | -0.14% | -0.11% | -0.26% | |
| CHF | -0.07% | 0.03% | 0.06% | -0.07% | 0.12% | 0.14% | 0.26% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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