NEW YORK – “The overall service sector weakened in January, damped by softness at services providers,” according to the Federal Reserve Bank of Richmond service-sector activity survey, released today, “Retail sales were nearly flat for the month, although big-ticket sales remained in decline. For the first time since December 2007, shopper traffic rose. Merchants' inventories also increased slightly in January. In contrast to the strengthening at retail establishments, however, revenues at services firms fell this month. Even so, survey respondents overall were upbeat about business prospects for the six months ahead.”
The indexes are the percentage of responding firms reporting increase, less the percentage reporting a decrease.
Overall, the service sector revenues index remained negative 9 in January, unchanged from negative 9 in December, while the number of employees index improved to negative 7 from negative 9, the average wage index held at zero, and the expected product demand during the next six months index gained to 27 from 18.
By sector, the retail area excluding services firms reported the sales revenues index rebounded to positive 1 in January from negative 18 in December, the number of employees index narrowed to negative 8 from negative 16, while the average wages index declined to zero from 4. The inventories index reversed to positive 4 from negative 9, while the big-ticket sales index climbed to negative 20 from negative 31. The shopper traffic index increased to positive 3 from negative 7, while expected product demand during the next six months rose to 37 from 26.
For services firms excluding retail, the revenues index was negative 9, the same as last month, while the number of employees index slipped to negative 6 from negative 3, and the average wage index increased to negative 1 from negative 3 the prior month. The expected product demand during the next six months index gained to 19 from 14.
The current price trend for the two sectors together dipped to 0.21 from 0.39, while falling to 1.08 from 1.11 for retail alone and falling to negative 0.19 from positive 0.04 for services, excluding retail.
The expected price trend index for the two sectors together slid to 0.73 in January from 1.04 in December, while decreasing to 1.49 from 1.73 for retail alone and slowing to 0.57 from 0.90 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.
