Services Sector Contracts for First Time Since Early 2022
The services sector—everything from restaurants to consulting firms to healthcare—shrank in March for the first time in over three years. The S&P Global Services PMI dropped to 49.8 from 51.7 in February, falling below the 50-point threshold that separates expansion from contraction.
Bottom Line
The services sector contracted in March for the first time since early 2022, driven by weakening business confidence amid rising energy costs. This matters because services encompass most economic activity Americans interact with daily, and contraction here often precedes broader economic slowdowns. It's not a crisis signal, but it is an early warning that the economy's momentum may be shifting.
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