NEW YORK – “Activity in the service sector remained weak in December,” according to the Federal Reserve Bank of Richmond service-sector activity survey, released today, “Retail sales dropped sharply, led by falling big-ticket sales, and shopper traffic declined. Retail inventory contraction slowed. Revenues at services firms also fell in December. Looking ahead six months, however, survey respondents were optimistic about business prospects.”
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 9 in December from negative 7 in November, while the number of employees index reversed to negative 9 from positive 2, the average wage index slipped to zero from 1, and the expected product demand during the next six months index dipped to 18 from 21.
By sector, the retail area excluding services firms reported the sales revenues index slumped to negative 18 in December from positive 1 in November, the number of employees index widened to negative 16 from negative 9, while the average wages index reversed to positive 4 from negative 1. The inventories index narrowed to negative 9 from negative 20, while the big-ticket sales index dropped to negative 31 from negative 24. The shopper traffic index widened to negative 7 from negative 3, while expected product demand during the next six months fell to 26 from 37.
For services firms excluding retail, the revenues index was negative 9, up from negative 11 last month, while the number of employees index reversed to negative 3 from positive 3, and the average wage index decreased to negative 3 from zero the prior month. The expected product demand during the next six months index gained to 14 from 12.
The current price trend for the two sectors together reversed to positive 0.39 from negative 0.30, while gaining to 1.11 from 0.97 for retail alone and growing to positive 0.04 from negative 0.72 for services, excluding retail.
The expected price trend index for the two sectors together rose to 1.04 in December from 0.40 in November, while decreasing to 1.73 from 1.82 for retail alone and growing to positive 0.90 from negative 0.08 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.
