Kansas City Fed Services Activity Index Steady in May
By Colin Kellaher
Services activity in the middle of the U.S. remained strong in
May, while expectations for future activity eased a bit while
remaining positive, according to a monthly survey by the Federal
Reserve Bank of Kansas City.
The Tenth District Services Survey's composite index, a weighted
average of indexes covering revenue/sales, employment and
inventory, came in at 20 for May, matching April's reading but down
from 30 in March. Readings above zero indicate expansion, while
those below zero indicate contraction.
The Kansas City Fed said the May reading was driven by more
activity in transportation, retail trade, tourism and hotels, and
restaurants, while growth eased for real estate, auto activity, and
furniture and home-furnishing stores.
The bank said expectations for future services slipped in May
but remained in positive territory with a reading of 26, down from
42 in April.
Higher inflation and supply shortages continued to weigh on
firms surveyed. The bank said nearly 75% of firms reported worse
supply disruptions and shortages compared with 2021, with most
expecting those conditions to last at least another six months.
Some 88% of firms surveyed said they were affected by rising
materials prices and a lack of availability/delivery times, while
around 64% said they expect wages and prices to rise slightly or
significantly faster compared with a year ago.
The Kansas City Fed's survey includes participants from such
service industries as retail and wholesale trade, automobile
dealers, real estate and restaurants. The survey provides
information on current services activity in the Tenth District,
which includes Colorado, Oklahoma, Wyoming, Nebraska, Kansas, the
northern half of New Mexico and the western third of Missouri.
The bank's monthly manufacturing survey, released Thursday,
showed that factory activity in central U.S. cooled in May compared
with the previous month, but continued to expand at a solid
Write to Colin Kellaher at email@example.com
(END) Dow Jones Newswires
May 27, 2022 11:38 ET (15:38 GMT)
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