The Fifth District Service Sector Survey showed a solid improvement in May 2026, according to the Federal Reserve Bank of Richmond. The revenues index climbed to 14 from 9, marking its highest level since December 2024, while the demand index increased to 15 from 10. Expectations also remained upbeat, with the indexes for future revenues and demand staying firmly in positive territory.
Assessments of local business conditions strengthened as well: the corresponding index rose to 0 in May from -6 in April, and the forward-looking business conditions index increased to 12.
Labor market indicators were more mixed. The current employment index slipped to -1 from 6, although the index for expected employment was little changed at 24. Both current and expected wages continued to register positive readings.
Price pressures showed signs of easing. The average growth rate of prices paid dipped to 5.4 from 5.7, and prices received edged down to 3.4 from 3.5. Firms anticipate that growth in both prices paid and prices received will moderate somewhat over the next 12 months.
