Why are prices of services now rising much faster than prices of manufactured products?

In the United States, the year-on-year rise in prices of services excluding rents was 5 . 0 % in May 2024 , while prices of manufactured goods fell by 1. 7 % year-on-year. In the euro zone, the year-on-year rise in services prices excluding rents was 3.6% in May 2024, while manufactured goods prices rose by a modest 0.8% year-on-year. How can we explain this divergence between inflation in services and inflation in manufactured goods? There are three possible explanations: The fall in import prices; A divergence between unit labour costs in industry and services; A sharp fall in profit margins in industry. We see that the divergence between the sharp rise in prices of services and the fall (United States) or small rise (euro zone) in prices of manufactured products since the end of 2022 can be explained: In the United States, by the fall in import prices; In the euro zone, by the fall in import prices and the decline in profit margins.