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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