10 December 2002, 18:11  Richmond Federal Reserve's Services Sector Survey for November released Tuesday

WASHINGTON (MktNews) - The following is the text of the Richmond Federal Reserve's Services Sector Survey for November released Tuesday: According to the Richmond Fed's November survey, retail revenues fell again while service firms' revenues rebounded. District retailers cited sparse shopper traffic and especially weak big ticket sales as reasons for lower revenues. Increased demand for health services and business consulting pulled revenues up at services firms. On the employment front, services job numbers continued to slip, while wages held close to their 3-month average. Despite the lackluster November report, respondents' outlook was for improvement in the months ahead. Overall Service Sector Revenues for the sector were flat in November -- index 0. For the month, revenues at services firms offset decreases in retail sales. However, November was well above the October readings -- last month, the index stood at -27. Service sector wages continued to grow at a rate in line with the last 3 months: the index reached 13, compared to the 3-month average of 11. However, the number of employees in both retail and services fell to an index of -15, still ahead of October's -21. Retail Sales at district stores contracted in November. The index settled at -11, losing less ground than in October, when the index was -35. Weakness was especially pronounced in the sale of big ticket items. The index registered a lackluster -28. In October, big ticket sales fell to an index of -34. Shopper traffic was also weak, coming in at an index of -27, versus -45 last month. Retail employment cutbacks continued in November, as that index edged down to -18, compared to -15 a month earlier. Despite fewer jobs, pay was up -- the average wage index advanced to 16, from 13 in October. Looking ahead, retail establishments were more enthusiastic about prospects in coming months; the index of expected product demand for the next 6 months surged to 31 from 6 a month ago. Services Firms Services firms' revenue gains bounced back in November -- the index reached 12, up from -11 last month. Average wages advanced more slowly, to 11, comparable to October's rise of 12. Employment dipped in November, but not as sharply as in October -- the index cooled to -10, versus -22 last month. Prices Prices for the overall service sector edged up at a 0.64 annual rate in November, compared to 0.83 percent in October. Retail prices grew at a 0.82 percent annual rate, following a rate of 1.09 percent a month ago. At services firms, prices grew at an annualized 0.35 percent, compared to 0.64 percent in October. Expectations of price increases for the next six months were lower, at 1.33 percent for the overall services sector. Last month, 1.57 percent price growth was anticipated. Retail respondents looked for 1.19 percent growth in prices, just below their October expectation of 1.20 percent. Services firms anticipated a 1.50 percent rise, compared to October's outlook of 1.70 percent annual increase in prices. 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.

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