Richmond Fed: Service Sector Sees Strength, Optimism

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

Overall, the service sector revenues index rose to 15 from 4, while the number of employees index fell to 8 from 12, the average wage index remained at 24, and the expected product demand during the next six months index grew to 38 from 36.

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 climbed to 40 from 30, the number of employees index reversed to positive 7 from negative 6, while the average wages index slumped to 22 from 49. The inventories index dipped to 2 from 3, while the big-ticket sales index slid to 32 from 35. The shopper traffic index increased to 36 from 29, while expected product demand during the next six months fell to 51 from 72.

For services firms excluding retail, the revenues index was 11 compared with zero last month, while the number of employees index fell to 8 from 15, and the average wage index grew to 24 from 19. The expected product demand during the next six months index climbed to 36 from 28.

The current price trend for the two sectors together grew to 1.65 from 1.31, while gaining to 2.79 from 1.51 for retail alone and rising to 1.45 from 1.27 for services, excluding retail.

The expected price trend index for the two sectors together increased to 1.84 in January from 1.75 in December, while jumping to 3.02 from 1.98 for retail alone and dipping to 1.63 from 1.71 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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