NEW YORK – “Service sector activity slumped in October,” according to the Federal Reserve Bank of Richmond service-sector activity survey, released today, “Retail sales dropped as shopper traffic diminished and big-ticket sales declined. Inventories also fell, although reductions were less pervasive than a month ago. Services firms' revenues also contracted in October. Looking ahead, survey respondents scaled back their expectations for business opportunities in the next six months.”
The indexes are the percentage of responding firms reporting increase, less the percentage reporting a decrease.
Overall, the service sector revenues index widened to negative 22 in October from 12 in September, while the number of employees index dropped to negative 17 from negative 7, the average wage index reversed to negative 6 from positive 4, and the expected product demand during the next six months index fell to 3 from 17.
By sector, the retail area excluding services firms reported the sales revenues index slumped to negative 23 in October from negative 6 in September, the number of employees index widened to negative 22 from negative 11, while the average wages index jumped to 10 from 3. The inventories index narrowed to negative 23 from negative 34, while the big-ticket sales index declined to negative 37 from negative 32. The shopper traffic index fell to negative 26 from negative 3, while expected product demand during the next six months slid to 12 from 16.
For services firms excluding retail, the revenues index was negative 22, down from negative 18 last month, while the number of employees index dropped to negative 16 from negative 9, and the average wage index reversed to negative 12 from positive 1 the prior month. The expected product demand during the next six months index dipped to 2 from 18.
The current price trend for the two sectors together slid to 0.04 in October from 0.21 in September, while gaining to 0.96 from 0.71 for retail alone and widening to negative 0.38 from negative 0.05 for services, excluding retail.
The expected price trend index for the two sectors together grew to 0.87 in October from 0.72 in September, while increasing to 1.30 from 1.22 for retail alone and climbing to 0.74 from 0.49 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.
