Yesterday the Dallas Fed released monthly activity surveys for the services and retail sectors in May. These surveys are similar to PMIs, with readings above zero indicating more respondents seeing improvement than those seeing declines, and vice-versa. Looking at revenue first, Services businesses reported much less widespread revenue declines than in April. As a reminder, though, a reading below zero still indicates revenue declines, so the May reading still indicates widespread drops in Services spending; that said, the outlook has bounced back into positive territory, which is a great sign.
Retail businesses specifically have seen an even bigger bounce in revenues that brings that state’s retail sector to almost zero revenue declines in May. Retail businesses report an even more dramatic reading for future revenue expectations, with the series in totally normal territory at this point.
Finally, we note that while revenues look to be firming up, employment is still dropping and there isn’t a big surge in re-hiring yet for services businesses. The company outlook category, despite having half of its drop reversed, is still about where it was at the lows of the last recession. Start a two-week free trial to Bespoke Institutional to access our full research platform and our unique investor tools.