FX.co ★ US 5th District Service Sector Downturn Eases Slightly

The Fifth District Service Sector Survey for January 2026, conducted by the Federal Reserve Bank of Richmond, indicated a third consecutive month of reduced activity, although the slowdown was less pronounced. The survey showed a slight improvement, with the revenues index rising to -3 from the previous month's -6. Additionally, the demand index turned positive, moving to 2 from -3. Employment figures remained stable with a current employment index holding at 5, and expectations for future employment grew, as indicated by an increase in the forward-looking employment index to 20 from 14. The wages index showed a minor uptick to 20 from 17, with firms maintaining plans to raise wages in the forthcoming six months. Notably, there was a marked reduction in average prices paid in January, contrasted by a modest rise in prices received. Firms anticipate that price growth will largely remain unchanged over the next year. Prospects improved overall, with future revenue and demand indexes entering further into positive zones. The local business conditions index saw a slight improvement, moving up to -6 from -11 the previous month, while the outlook for future local business conditions remained steady at 7.