For immediate release: March 9, 2011
New Dallas Fed Index Shows Expanding Texas Service Sector, Weakening Retail Sales for May
DALLAS— A new survey introduced today by the Federal Reserve Bank of Dallas indicates that activity in the Texas service sector increased in May, but at a slower pace than last month.
The Texas Service Sector Outlook Survey (TSSOS) is conducted monthly by the Dallas Fed to obtain a timely assessment of activity in the state’s service sector, which represents 59 percent of the state economy and employs close to seven million workers.
The TSSOS also includes a component called the Texas Retail Outlook Survey, which uses information from respondents in the retail and wholesale sectors only.
About 230 Texas service sector firms regularly participate in TSSOS and report on monthly changes in business conditions. The Dallas Fed began gathering survey data in 2007. The data have been seasonally adjusted and are a reliable indicator of changes in regional economic activity and employment.
The TSSOS revenue index—a key measure of state service sector conditions—fell from 12 to 2 in May, indicative of slower revenue growth.
Positive readings in the survey generally indicate expansion of service sector activity, while readings below zero generally indicate contraction.
Labor market indicators continued to reflect some hiring and slightly longer workweeks. Indexes of future service sector activity generally decreased from April but remained positive with the exception of part-time employment, which dipped into negative territory.
Respondents were less optimistic about the broader economy this month. The general business activity index fell from 8 to -2, its first negative reading since July 2010.
Retail sales fell in May, according to respondents of the retail portion of the survey. The volatile sales index fell from 14 to -5, following two months of positive readings, and inventories were flat.
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