The U.S. services sector recorded a sharp slowdown in hiring in March, as the ISM Non-Manufacturing Employment Index fell to 45.2 from 51.8 in February 2026. The latest reading, updated on 06 April 2026, signals a contraction in employment within the non-manufacturing side of the economy, following an expansionary print just a month earlier.
The drop below the 50 threshold marks a notable shift in momentum for the labor market in services, which make up the bulk of U.S. economic activity. February’s reading of 51.8 had indicated modest job growth, but March’s 45.2 suggests that employers in sectors such as retail, hospitality, health care, and professional services may have scaled back hiring or reduced staff.
This deterioration in service-sector employment conditions in March 2026 could raise concerns about the durability of broader U.S. labor market strength, as investors and policymakers watch closely for signs of cooling demand and potential spillovers into overall economic growth.
