The survey from the Federal Reserve Bank of Richmond revealed that the
U.S. fifth district's service sector activity expanded slightly in May after
three months of contraction.
According to the survey, the service sector revenues index climbed from -13
in April to +3 in May. This was the highest reading since January (+4).
However, the survey also found a decrease in the demand index (to +1 this
month, up from +9 in April). Meanwhile, the employment index rose (to +6, up
from +1 in April) while companies continued to report wage increases (+20,
compared to +22 in April) and some improvement in their ability to find workers
with the necessary skills (+6, compared to -4 April).
In other survey results, expectations indexes for future revenue (+32, up
from +24 in April), demand (+15, down from +24 in April) and employment (+15, down
from +19 in April) showed mixed performances but remained in positive territory.
On the price front, the average growth in prices paid (+5.71, down from +6.11
in April) dropped marginally in May, while prices received (+4.09, up from +3.64)
rose slightly. Both growth rates, however, are expected to moderate over the
coming year (to +4.80 and +3.77, respectively).