According to a monthly survey conducted by the Federal Reserve Bank of Kansas City, services activity in the middle of the U.S. saw slight growth in September. However, expectations for future activity have slightly decreased.
The Tenth District Services Survey
The composite index of the Tenth District Services Survey, which is a weighted average of indexes covering revenue/sales, employment, and inventory, registered at 2 in September. This indicates an improvement compared to the negative readings of minus 1 in both August and July. It’s important to note that readings above zero represent expansion, while those below zero signify contraction.
The Kansas City Fed shared that all month-over-month indexes experienced an increase compared to previous readings, except for the employment index, which turned negative. Similarly, the capital-spending index cooled down but maintained its expansionary status.
Expectations for Future Services Activity
The index of expectations for future services activity, as reported by the Kansas City Fed, declined from 4 in August to 3 in September. This shift was driven by surveyed firms expressing their anticipation of stagnant employment growth.
Participants and Geographic Coverage
The Kansas City Fed’s survey encompasses participants from various service industries such as retail and wholesale trade, automobile dealers, real estate, and restaurants. The survey provides insight into the current services activity within the Tenth District, which includes Colorado, Oklahoma, Wyoming, Nebraska, Kansas, the northern half of New Mexico, and the western third of Missouri.
In addition to the services survey, the Kansas City Fed also released its monthly manufacturing survey. It revealed a decline in factory activity in the central U.S. region during September, reflecting persisting concerns over economic conditions.