Richmond Fed: Service Sector Pace Slows

Service sector activity "increased at a slower pace in May," according to the Federal Reserve Bank of Richmond service-sector activity survey, released Tuesday.

Overall, the service sector revenues index fell to 11 from 15, while the number of employees index grew to 18 from 13, the average wage index decreased to 17 from 28, and the expected product demand during the next six months index fell to 18 from 25.

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 dropped to 1 from 37, the number of employees index dipped to negative 3 from negative 1, while the average wages index slumped to 13 from 32. The inventories index climbed to 54 from 43, while the big-ticket sales index plummeted to negative 9 from positive 41. The shopper traffic index fell to 28 from 54, while expected product demand during the next six months plunged to 4 from 54.

For services firms excluding retail, the revenues index was 12 compared with 12 last month, while the number of employees index grew to 21 from 14, and the average wage index declined to 17 from 28. The expected product demand during the next six months index decreased to 19 from 22.

The current price trend for the two sectors together rose to 1.49 from 1.32, while gaining to 1.39 from 1.26 for retail alone and growing to 1.50 from 1.32 for services, excluding retail.

The expected price trend index for the two sectors together increased to 1.80 in May from 1.46 in April, while slipping to 1.72 from 1.79 for retail alone and rising to 1.81 from 1.41 from 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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