NEW YORK – “Activity in the service sector contracted more slowly in November,” according to the Federal Reserve Bank of Richmond service-sector activity survey, released today, “The fall in retail sales halted and shopper traffic declined only slightly. In addition, the contraction in big-ticket sales slowed, owing in part to an uptick in sales of new and used automobiles. Inventory reductions nearly matched last month's. Revenues at services firms contracted; however, the decline was not as widespread as in October. Looking ahead six months, survey respondents were much more optimistic about business prospects than they were last month.”
The indexes are the percentage of responding firms reporting increase, less the percentage reporting a decrease.
Overall, the service sector revenues index narrowed to negative 7 in November from 22 in October, while the number of employees index reversed to positive 2 from negative 17, the average wage index reversed to positive 1 from negative 6, and the expected product demand during the next six months index soared to 21 from 3.
By sector, the retail area excluding services firms reported the sales revenues index jumped to positive 1 in November from negative 23 in October, the number of employees index narrowed to negative 9 from negative 22, while the average wages index slumped to negative 1 from positive 10. The inventories index narrowed to negative 20 from negative 23, while the big-ticket sales index improved to negative 24 from negative 37. The shopper traffic index narrowed to negative 3 from negative 26, while expected product demand during the next six months tripled to 37 from 12.
For services firms excluding retail, the revenues index was negative 11, up from negative 22 last month, while the number of employees index surged to positive 3 from negative 16, and the average wage index increased to zero from negative 12 the prior month. The expected product demand during the next six months index jumped to 12 from 2.
The current price trend for the two sectors together slid to negative 0.30 from positive 0.04, while gaining to 0.97 from 0.96 for retail alone and widening to negative 0.72 from negative 0.38 for services, excluding retail.
The expected price trend index for the two sectors together fell to 0.40 in November from 0.87 in October, while increasing to 1.82 from 1.30 for retail alone and dropping to 0.08 from 0.74 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.
