The Fifth District Service Sector Survey pointed to improving conditions in March 2026, ending a four-month streak of contracting activity and reaching its highest level since March 2025, according to the Federal Reserve Bank of Richmond. The revenues index climbed to 9 from -8 in February, while the demand index strengthened to 21 from -3. Expectations for future revenues (36 versus 35) and demand (33 versus 28) remained solidly positive. The index for local business conditions improved to 2 from -10 in February, though expectations for future conditions softened to 9 from 16.
Labor market indicators also showed gains. The current employment index rose to 9 from 0 in February, and the forward-looking employment index increased to 22 from 15. The wages index edged up to 19 from 17, and firms continued to anticipate wage growth over the next six months. Average growth rates of both prices paid and prices received eased slightly. Over the next 12 months, firms expect the pace of price increases for inputs to moderate, while the growth in prices received is projected to remain stable.
