Service sector activity slowed in May, according to the latest survey by the Federal Reserve Bank of Richmond. Retail sales dwindled as shopper traffic dropped sharply; big ticket sales remained in decline. Revenues also weakened at non-retail services firms. Looking ahead six months, retail merchants pulled back from their optimism of a month ago. Non-retail services providers maintained a positive outlook, but were less upbeat than in April.
Service sector revenues softened in May, pulling the index to 9 from 28.
The internals were NASTY on retail traffic and sales:
Retail sales cooled in May, as shopper traffic fell sharply. The revenues index slashed twenty-one points from last month’s reading, ending the survey period at 3. The index for shopper traffic plummeted from 34 to -29 in May. In addition, falling big-ticket sales remained a drag on overall sales revenues. The big-ticket index faltered once again, finishing at -27, compared to April’s -31.
That’s outright contraction and not in a small way either.
Recession indicator? Yep. Look at the deterioration in the retail indicators:
Revenues down, wage demand up, big ticket sales in the trashcan and shopper traffic collapsed.
“Here it comes”