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Fifth District Survey of Service Sector Activity

Oct. 23, 2018 10 a.m.

Fifth District Service Sector Activity Softened in October

Overview

Fifth District service sector activity softened in October, according to the results of the latest survey by the Federal Reserve Bank of Richmond. The revenues index dropped from 18 in September to −1 in October, its first negative reading since November 2013. Measures of demand and local business conditions also fell but remained in expansionary territory. However, firms were optimistic, expecting to see growth in the coming months.

Service sector firms reported softening employment growth but strengthening wage growth. Difficulty finding workers with necessary skills persisted in October, as the skills index fell to −32, its lowest value on record. Respondents expected this difficulty to continue in the near future.

Firms reported faster growth of both prices paid and received in October. Growth in prices received reached its highest value since November 2000 but continued to trail growth of prices paid. Firms believe the gap between growth of prices paid and received will narrow in the next six months.

Charts

Index Table

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Regional Survey Team (804) 697-8702