By Scott Kanowsky
Investing.com -- Growth in business activity in the services sector in the U.S. slowed by more than expected in March, while price pressures showed signs of easing and the pace of new orders plunged.
The closely watched ISM non-manufacturing sector index for March dipped to 51.2 for the month, down from a previous reading of 55.1 in February and 55.2 in January. The figure was still above the 50-point mark that denotes expansion from contraction, but below economists' projections of 54.5.
"There has been a pullback in the rate of growth for the services sector," said ISM chair Anthony Nieves in a statement.
The prices paid for inputs slipped to 59.5 - its lowest level since 2020 - from 65.6 in the prior month.
Meanwhile, the ISM's gauge of new orders received by services businesses, which make up a majority of the economy, fell sharply to 52.2 from 62.6 in February but managed to avoid contraction.
Out of the 13 industries included in the survey, some respondents noted that while sales remained healthy, they were still concerned about an uncertain economic outlook.
Interest rates have risen following a recent period of aggressive Federal Reserve monetary policy tightening aimed at cooling down red-hot inflation. The trend has helped shift spending away from goods, which are typically purchased on credit. However, worries persist that the Fed's moves may eventually tip the world's largest economy into a recession.