12.01.2009 Policy Points

Service Activity in the South Atlantic: Nov.

From the Federal Reserve Bank of Richmond’s October survey of service-sector activity in the South Atlantic (District of Columbia, Maryland, North Carolina, South Carolina, Virginia and West Virginia):

Activity in the service sector contracted more slowly in November, according to the latest survey by the Federal Reserve Bank of Richmond. The fall in retail sales halted and shopper traffic declined only slightly. In addition, the contraction in big-ticket sales slowed, owing in part to an uptick in sales of new and used automobiles. Inventory reductions nearly matched last month’s. Revenues at services firms contracted; however, the decline was not as widespread as in October. Looking ahead six months, survey respondents were much more optimistic about business prospects than they were last month.

Turning to service sector labor markets, job cuts diminished at retail establishments, while the number of employees edged up at services firms. Average wage growth flattened. Price change in the overall service sector turned mildly negative, damped by continuing modest price deflation at services firms. Merchants anticipated an uptick in retail price growth during the next six months, while survey respondents at services firms looked for little price change.

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