By Colin Kellaher

Services activity in the middle of the U.S. continued to grow in September, and expectations for future activity remained positive, according to a monthly survey by the Federal Reserve Bank of Kansas City.

The Tenth District Services Survey's composite index, a weighted average of indexes covering revenue/sales, employment and inventory, came in at 20 for September, up from readings of 14 in August and 2 in July. Readings above zero indicate expansion, while those below zero indicate contraction.

The Kansas City Fed said September's improvement was driven by higher activity in restaurants, transportation, wholesale trade and professional services.

"Overall, regional services firms saw solid growth in revenue in September," said Chad Wilkerson, vice president and economist at the bank. "However, firms saw less growth in employment and price pressures continued."

The bank said expectations for future services activity posted a reading of 9 in September, down slightly from 10 in August but still in positive territory.

The Kansas City Fed's survey includes participants from such service industries as retail and wholesale trade, automobile dealers, real estate and restaurants. The survey provides information on current services activity in the Tenth District, which includes Colorado, Oklahoma, Wyoming, Nebraska, Kansas, the northern half of New Mexico and the western third of Missouri.

The bank's monthly manufacturing survey, released Thursday, showed that factory activity in the central U.S. region expanded marginally in September, while firms were moderately optimistic about the short-term outlook.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

September 23, 2022 12:06 ET (16:06 GMT)