By Colin Kellaher


Growth in services activity in the middle of the U.S. fell in January, and expectations for future activity moved into negative territory, 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 minus 11 in January, down from readings of zero in December and 12 in November. Readings above zero indicate expansion, while those below zero indicate contraction.

The Kansas City Fed said January's decrease was driven by lower auto, retail trade, real-estate and wholesale trade activity, while activity in transportation, tourism and health services rose during the month.

The bank said expectations for future services activity posted a reading of minus 2 in January, down from 4 in December.

Chad Wilkerson, senior vice president at the bank, noted that while expectations for future services fell, hiring plans among firms surveyed remained moderately positive.

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 the central U.S. region contracted slightly in January, signaling the sector's persisting headwinds as demand dwindles amid rising interest rates.


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(END) Dow Jones Newswires

January 27, 2023 11:51 ET (16:51 GMT)

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