NEW YORK – “Service sector activity pulled back in August,” according to the Federal Reserve Bank of Richmond service-sector activity survey, released today, “After three months of nearly flat sales, overall retail revenues declined, led by a sharp drop in big-ticket sales. Depressed shopper traffic added to the slump in retail activity. Merchants reduced inventories as they predicted weak demand for their products in the coming six months. Revenues at non-retail services firms also dropped in August, following five months of mild expansion. Services providers softened their outlook regarding demand for their services in 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 slid to negative 10 in August, from positive 8 in July, while the number of employees index slipped to negative 8 from negative 6, the average wage index rose to positive 8 from negative 4, and the expected product demand during the next six months index slipped to 20 from 27.
By sector, the retail area excluding services firms reported the sales revenues index dipped to negative 8 in August from zero in July, the number of employees index remained at negative 29, while the average wages index increased to positive 5 from negative 1. The inventories index widened to negative 16 from negative 13, while the big-ticket sales index narrowed to negative 20 from negative 23. The shopper traffic index slipped to negative 21 from negative 19, while expected product demand during the next six months fell to 4 from 12.
For services firms excluding retail, the revenues index was negative 7, compared to positive 10 last month, while the number of employees index held at zero, and the average wage index reversed to positive 9 from negative 1. The expected product demand during the next six months index slipped to 25 from 32.
The current price trend for the two sectors together grew to 0.66 from 0.49, while dipping to 1.02 from 1.10 for retail alone and growing to 0.53 from 0.31 for services, excluding retail.
The expected price trend index for the two sectors together fell to 0.83 in August from 0.84 in July, while increasing to 1.50 from 1.49 for retail alone and slowing to 0.57 from 0.67 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.
