The Richmond Fed’s Fifth District Service Sector Survey was largely unchanged in July 2026, marking a second straight month of flat activity. The revenues index slipped to -3 from 0, while the demand index inched up to 5 from 4. Assessments of current local business conditions improved slightly, with the index rising to -5 from -7, but expectations softened: the index for future business conditions fell to 9 from 16.
Employment growth moderated, as the current employment index declined to 4 from 8. However, the forward-looking employment index was little changed at 23, indicating that firms still plan to expand hiring. Wage growth remained solid, with both current and expected wage indexes staying in positive territory.
Price pressures eased somewhat: the growth rate of prices paid slowed, while prices received rose marginally. Firms expect both measures of price growth to ease further over the next 12 months.
