NEW YORK – “Service sector activity contracted in February,” according to the Federal Reserve Bank of Richmond service-sector activity survey, released today, “Retail sales fell, with big-ticket sales dropping sharply. In addition, services firms revenues contracted. Shopper traffic dissipated, held down in part by a series of heavy snow storms that occurred on weekends. Retail inventories were little changed. Looking ahead, survey respondents remained optimistic about business prospects during the next six months, although their outlook was less upbeat than a month ago.”
The indexes are the percentage of responding firms reporting increase, less the percentage reporting a decrease.
Overall, the service sector revenues index declined to negative 15 in February, from negative 9 in January, while the number of employees index dipped to negative 8 from negative 7, the average wage index rose to 5 from zero, and the expected product demand during the next six months index dropped to 17 from 27.
By sector, the retail area excluding services firms reported the sales revenues index dropped to negative 15 in February from positive 1 in January, the number of employees index widened to negative 22 from negative 8, while the average wages index increased to 7 from zero. The inventories index reversed to negative 1 from positive 4, while the big-ticket sales index slipped to negative 44 from negative 20. The shopper traffic index decreased to negative 19 from positive 3, while expected product demand during the next six months fell to 27 from 37.
For services firms excluding retail, the revenues index was negative 17, compared to negative 9 last month, while the number of employees index inched up to negative 3 from negative 6, and the average wage index increased to positive 4 from negative 1 the prior month. The expected product demand during the next six months index declined to 13 from 19.
The current price trend for the two sectors together grew to 0.33 from 0.21, while falling to 0.84 from 1.08 for retail alone and rising to positive 0.14 from negative 0.19 for services, excluding retail.
The expected price trend index for the two sectors together slid to 0.71 in February from 0.73 in January, while increasing to 1.80 from 1.49 for retail alone and slowing to 0.30 from 0.57 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.
