NEW YORK – “Activity in the broad service sector continued to grow in February, despite weaker conditions at retail establishments,” according to the Federal Reserve Bank of Richmond service-sector activity survey, released today, “Retail sales slumped in February, as shopper traffic declined and big-ticket sales fell; inventories rose. Revenues grew at non-retail services firms, although slightly less rapidly than a month earlier. Looking ahead six months, survey respondents expected stronger consumer demand, although optimism among services providers was partly offset by a bleaker outlook from retailers, compared to 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 decreased to 11 in February, from 12 in January, while the number of employees index grew to 10 from 9, the average wage index rose dipped to 6 from 9, and the expected product demand during the next six months index jumped to 17 from 10.
By sector, the retail area excluding services firms reported the sales revenues index slumped to negative 12 in February from positive 33 in January, the number of employees index reversed to positive 3 from negative 8, while the average wages index gained to 27 from 25. The inventories index crept to 20 from 19, while the big-ticket sales index dropped to negative 37 from negative 9. The shopper traffic index fell to negative 9 from positive 30, while expected product demand during the next six months fell to negative 31 from positive 15.
For services firms excluding retail, the revenues index was 7, compared to 9 last month, while the number of employees index slid to 9 from 12, and the average wage index slipped to 1 from 5. The expected product demand during the next six months index rose to 22 from 11.
The current price trend for the two sectors together grew to 0.55 from 0.36, while gaining to 1.46 from 1.16 for retail alone and growing to 0.41 from 0.16 for services, excluding retail.
The expected price trend index for the two sectors together rose to 1.56 in February from 1.23 in January, while increasing to 1.78 from 1.40 for retail alone and climbing to 1.54 from 1.22 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.
