The U.S. services sector experienced significant price increases in March, with the Institute for Supply Management (ISM) Services Price Index climbing to 70.7, marking its highest level since October 2022. This represents a 7.7 percentage point rise from the previous month, the largest monthly increase in nearly 14 years. The surge in input prices is attributed to rising energy costs and other inputs, exacerbated by geopolitical tensions. Despite the price index surge, the overall ISM Services Index fell by 2.1 percentage points to 54, driven by a sharp decline in employment and a slowdown in business activity growth. The services employment index dropped 6.6 percentage points to 45.2, reflecting one of the largest monthly declines since the COVID-19 pandemic. Meanwhile, the business activity index decreased by 6 percentage points to 53.9, the most significant drop since mid-2024. However, new orders for service providers grew at the strongest pace in over three years, indicating some resilience in demand.