According to a monthly survey by the Federal Reserve Bank of Kansas City, there has been a slight increase in growth in services activity in the middle of the U.S. in November. Expectations for future activity have also risen modestly.
The Tenth District Services Survey
The Tenth District Services Survey’s composite index, which is a weighted average of indexes covering revenue/sales, employment, and inventory, rose to 1 in November from a reading of minus 1 in October. However, it was lower than the reading of 2 in September. It’s important to note that readings above zero indicate expansion, while those below zero indicate contraction.
Changes in Revenue
The Kansas City Fed reported that revenue increased in real estate, professional services, and healthcare sectors in November. However, it fell in wholesale and retail trade, autos, and tourism.
Most month-over-month indexes showed a slight increase in November compared to previous readings, except for the employment index.
Optimism for Future Services Activity
The Kansas City Fed’s index of expectations for future services activity rose to 13 in November, up from 7 in October and 3 in September. This indicates that firms surveyed are becoming more optimistic about their revenue prospects for the next six months.
The Survey Participants
The Kansas City Fed’s survey includes participants from various service industries such as retail and wholesale trade, automobile dealers, real estate, and restaurants. It provides valuable information on current services activity in the Tenth District, which consists of Colorado, Oklahoma, Wyoming, Nebraska, Kansas, the northern half of New Mexico, and the western third of Missouri.
In a separate survey released by the bank on Thursday, it was revealed that factory activity in the central U.S. contracted for a third consecutive month in November. However, the pace of contraction was slower compared to October.