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First Cut: Richmond Fed service sector revenues hold on in December

The Richmond Fed’s Survey of Service Sector Activity showed that the revenue index held on and gained a bit at 17 in December from 15 in November.  However, expected revenues six months from now retreated to 29 in December from 32 in November. For 2019, the performance has been uneven for current revenues after the slowdown in late 2018. However, it appears to be more stable in the final months of the year and mildly expansionary.

The index for demand suggested that conditions are showing only normal month-to-month variation with the reading at 17 in December after 13 in November. Employment picked up again to 15 in December after a steep decline to 7 in November. However, the pace is modest. Some of that will be a consistent lack of available skills to fill open spots with the index at -14 after -22. Where hiring is taking place, wage gains were strong for December at 39 after 29 in the prior month and the highest since 39 in May.

Prices paid responded to higher energy costs and the index rose to 3.53 in December after 3.09 in November. Prices received also was up somewhat at 2.49 after 2.16. Upward price pressures remain modest.


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