Bad news. (I know, I know: “What other kind of news is there these days?”)

Activity across the US services sector decelerated fairly sharply last month, according to a lonely Monday macro release from the world’s largest economy.

At 54, the ISM services headline was a miss. Consensus wanted 54.9.

As the figure shows, the month-to-month drop was the most pronounced in a year.

Of course, 54’s hardly a disaster. And the New Orders index, at 60.6, suggests overall demand’s healthy.

But the juxtaposition between the Employment gauge — which plummeted nearly 7ppt — and the Price index — which predictably soared — was disconcerting.

Note that consensus did expect the input price metric to come in very warm, but at 70.7, it exceeded estimates. And the Employment metric undershot forecasts by a country mile.

It’s worth taking a moment to add some additional context for those prints.

70.7’s the highest readout on the Prices gauge since October of 2022, and the MoM gain — almost 8ppt — the largest in a very long time.

On the Employment side, 45.2 is the worst in over two years, the second-worst since Wuhan was still in the news, and the MoM drop was the largest since Trump’s tariff blitz.

“The predominant commentary this month was about impacts and adjustments due to the conflict with Iran and the expected flow through of higher oil prices at some point,” ISM’s Steve Miller said, noting that although the tariffs still came up, “Iran-related” remarks “dominated” the panelist comments.

“The war has added an additional layer of uncertainty on top of an already shaky macroeconomic climate,” one respondent sighed, cautioning that “a spike in inflation due to higher oil prices will reduce purchasing power, affecting every industry.”

That panelist, like the current occupant of the Oval Office, is in the Real Estate business.