NEW YORK – Service sector activity improved in July, according to the Federal Reserve Bank of Richmond service-sector activity survey, released Tuesday, “Retail sales rose sharply, despite lagging big-ticket sales and weaker shopper traffic. Retail inventories dropped. Non-retail services firms also reported stronger revenues this month. Looking ahead, survey participants expected stronger demand for goods and services through the end of the 2011 holiday season.”
Overall, the service sector revenues index increased to positive 7 in July, from negative 4 in June, while the number of employees index rose to zero from negative 2, the average wage index grew to 12 from 2, and the expected product demand during the next six months index nearly doubled to 23 from 12.
The indexes are the percentage of responding firms reporting increase, less the percentage reporting a decrease.
By sector, the retail area excluding services firms reported the sales revenues index surged to positive 11 in July from negative 21 in June, the number of employees index gained to positive 6 from negative 16, while the average wages index reversed to positive 17 from negative 18. The inventories index narrowed to negative 21 from negative 26, while the big-ticket sales index improved to negative 25 from negative 41. The shopper traffic index slipped to negative 11 from negative 4, while expected product demand during the next six months rose to positive 3 from negative 20.
For services firms excluding retail, the revenues index was 6, compared to zero last month, while the number of employees index slid to negative 4 from positive 2, and the average wage index climbed to 12 from 9. The expected product demand during the next six months index rose to 27 from 18.
The current price trend for the two sectors together rose to 0.79 from 0.66, while slowing to 0.75 from 1.70 for retail alone and growing to 0.86 from 0.44 for services, excluding retail.
The expected price trend index for the two sectors together rose to 1.34 in July from 1.22 in June, while decreasing to 1.20 from 2.03 for retail alone and jumping to 1.40 from 1.08 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.
