(The Center Square) – Business and professional services contracted while consumer services expanded in July, according to a report from the Federal Reserve Bank of Kansas City.
A composite index of services dropped to -4 in July after posting a 2 in June and 11 in May. The index is a weighted average of revenue and sales, employment and inventories. The Federal Reserve Bank of Kansas City – the Tenth District – serves the western third of Missouri, northern New Mexico, Kansas, Colorado, Nebraska, Oklahoma and Wyoming.
“Tenth District services activity declined modestly in July while expectations for the next six months remained expansionary,” according to the organization. “Selling prices were flat month-over-month while input prices still grew, although the pace of growth slowed.”
The report found most month-over-month indexes it tracked were positive or flat. However, the revenue and sales index fell from 4 in June to -16 in July. The year-over-year composite index fell from 8 to 3 as employment growth eased and revenues dropped slightly.
“The number of employees and employee hours worked indexes grew moderately while part-time employment and access to credit was essentially unchanged from last month,” according to the report.
The organization stated employment levels will moderate and inventories will decline in the coming months due to the composite expectations index for services declined from 10 to 6. Capital expenditures increased modestly for the second consecutive month after strong gains earlier this year.
The organization’s monthly survey focused on employee turnover, which increased in 23% of firms during the past year. There were 27% of businesses reporting a decrease in turnover while 50% reported no change.
“Additionally, 56% of the firms that reported an increase in turnover said that it has primarily increased for production workers and 6% said it has primarily increased for managerial workers, while 38% said it has primarily increased for both production and managerial workers,” according to the report.