Richmond Fed: Service Sector Improves

Service sector activity "strengthened in August," according to the Federal Reserve Bank of Richmond service-sector activity survey, released Tuesday.

Overall, the service sector revenues index soared to positive 14 in August, from negative 6 in July, while the number of employees index decreased to 1 from 2, the average wage index gained to 13 from 7, and the expected product demand during the next six months index rose to 19 from 11.

The indexes are the percentage of responding firms reporting increase, less the percentage reporting a decrease.

By sector, the retail area excluding services firms reported the sales revenues index narrowed to negative 15 from negative 22 in July, the number of employees index improved to negative 10 from negative 14, while the average wages index climbed to 12 from 1. The inventories index improved to negative 9 from negative 12, while the big-ticket sales index slid to negative 6 from negative 5. The shopper traffic index dropped to negative 17 from negative 16, while expected product demand during the next six months recovered to negative 13 from negative 29.

For services firms excluding retail, the revenues index was positive 19 compared with negative 3 last month, while the number of employees index slid to 3 from 4, and the average wage index gained to 13 from 9. The expected product demand during the next six months index increased to 25 from 17.

The current price trend for the two sectors together fell to 1.00 from 1.21, while gaining to 1.19 from 1.00 for retail alone and slowing to 0.97 from 1.22 for services, excluding retail.

The expected price trend index for the two sectors together fell to 1.46 in August from 1.63 in July, while decreasing to 1.50 from 1.91 for retail alone and dipping to 1.49 from 1.58 for services, excluding retail.

All firms surveyed are located within the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.

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