NEW YORK – “Service sector activity remained weak in October,” according to the Federal Reserve Bank of Richmond service-sector activity survey, released Tuesday, “For a second month, revenues dropped at non-retail services providing establishments. Retailers' revenues also fell, albeit more slowly than a month earlier, as big-ticket sales rose for the first time since April 2007 and the summer-long fall-off in shopper traffic nearly halted. In addition, merchants' inventories declined in October. Looking ahead, retailers were pessimistic in their expectations for sales over the next six months, while services providers' optimism ticked up.”
Overall, the service sector revenues index decreased to negative 8 in October, from negative 4 in September, while the number of employees index grew to zero from negative 2, the average wage index rose to 15 from 8, and the expected product demand during the next six months index increased to zero from negative 1.
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 narrowed to negative 8 in October from negative 10 in September, the number of employees index slipped to negative 9 from positive 1, while the average wages index climbed to 5 from 3. The inventories index fell to negative 3 from positive 4, while the big-ticket sales index surged to positive 4 from negative 48. The shopper traffic index gained to negative 1 from negative 32, while expected product demand during the next six months rose to negative 19 from negative 23.
For services firms excluding retail, the revenues index was negative 8, compared to negative 3 last month, while the number of employees index increased to positive 3 from negative 5, and the average wage index rose to 16 from 9. The expected product demand during the next six months index jumped to 8 from 2.
The current price trend for the two sectors together fell to 0.70 from 0.86, while dipping to 1.33 from 1.62 for retail alone and growing to 0.53 from 0.48 for services, excluding retail.
The expected price trend index for the two sectors together slid to 1.17 in October from 1.43 in September, while increasing to 2.02 from 1.71 for retail alone and dipping to 1.01 from 1.35 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.
