U.S. Services Sector Faced Heightened Inflation in March

By Matt Grossman

Inflation pressures facing U.S. services firms were the greatest in four years last month as the war in Iran pushed up energy prices, a survey of managers found.

The prices index in the Institute for Supply Management's survey of purchasing executives in the services industry rose to 70.7, from 63 a month earlier. Values over 50 indicate firms are facing rising prices. It was the index's largest one-month increase in 13 years.

"The war in Iran has added an additional layer of uncertainty on top of an already shaky macroeconomic climate," a manager from the real-estate industry told the survey. "A spike in inflation due to higher oil prices will reduce purchasing power, affecting every industry."

Economists are vigilant for signs that energy-price increases caused by the Iran war are spreading into other industries and pushing up prices more broadly. March inflation data are due out Friday from the Labor Department.

Overall, the services industry remained in expansion in March. The survey's overall index came in at 54, a slight decline from 56.1 in February. Analysts polled by The Wall Street Journal had expected a reading of 55.4.

Of the 16 industries tracked by the survey, 13 reported business growth. The retail, agriculture and public-administration categories noted declines.

Employment in the services sector flipped into a contraction, according to the survey. That index declined to 45.2, from 51.8 in February.

Write to Matt Grossman at matt.grossman@wsj.com

(END) Dow Jones Newswires

April 06, 2026 10:37 ET (14:37 GMT)