The Richmond Fed Services Revenues index improved significantly to 23 in December from 9 in November. This is the highest since the pandemic. Expectations remained at a very strong level at 53. Demand growth also saw a sharp improvement with the index up 11 pts to 25.

• Services employment is still muted. The Number of Employees index improved only slightly to 2 from -1 previously. Expectations of hiring, however, continued to get stronger, up 3 pts to 30.

• Services firms continued to show higher inflation and inflation expectations. Prices paid over the last year were up 4.67% YoY and expectations jumped from 3.85% YoY in November to 4.34% YoY in December. Prices received did not change much, still at 3.58% YoY, and expectations increased but to a lesser degree, up to 3.56% YoY (previously 3.46% YoY).