NEW YORK – “Service sector activity declined in October although the weakness in several indicators was less severe than a month earlier,” according to the Federal Reserve Bank of Richmond service-sector activity survey, released today, “Retail sales contraction continued, nearly matching September's drop. Nevertheless, shopper traffic flattened after falling for four months and big-ticket sales declined more slowly than a month ago. Retail inventories grew for the first time since January of 2010. Revenue weakness at services-providing firms was virtually the same as last month's. However, survey participants' predictions for business prospects during the next six months jumped up in October.”
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 7 in October, from negative 5 in September, while the number of employees index narrowed to negative 7 from negative 12, the average wage index rose remained 8, and the expected product demand during the next six months index jumped to 32 from 17.
By sector, the retail area excluding services firms reported the sales revenues index rose to negative 7 in October from negative 8 in September, the number of employees index rebounded to negative 15 from negative 22, while the average wages index increased to zero from negative 2. The inventories index reversed to positive 10 from negative 7, while the big-ticket sales index gained to negative 25 from negative 58. The shopper traffic index climbed to negative 1 from negative 16, while expected product demand during the next six months surged to 44 from 8.
For services firms excluding retail, the revenues index was negative 5, compared to negative 6 last month, while the number of employees index rose to negative 5 from negative 8, and the average wage index remained 9. The expected product demand during the next six months index jumped to 32 from 20.
The current price trend for the two sectors together grew to 0.56 from 0.34, while dipping to 0.98 from 1.22 for retail alone and growing to 0.41 from 0.01 for services, excluding retail.
The expected price trend index for the two sectors together rose to 1.03 in October from 0.80 in September, while increasing to 1.96 from 1.85 for retail alone and gaining to 0.38 from 0.78 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.
