Dallas Fed: Texas Service Sector Activity Strengthens
For immediate release: December 31, 2012
DALLAS—Texas service sector activity expanded in December, according to the Federal Reserve Bank of Dallas’ Texas Service Sector Outlook Survey.
The TSSOS revenue index—a key measure of state service sector conditions—rose from 11.1 to 14, with 36 percent of respondents noting revenues increased from November.
The survey 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 7 million workers.
Positive readings in the survey generally indicate expansion of service sector activity, while readings below zero generally indicate contraction.
A Labor market indicators reflected slightly stronger labor demand growth, including longer workweeks. The employment index edged up from 8.2 to 10.1. The hours worked index increased from 0.7 to 5.3.
Perceptions of broader economic conditions improved in December. The general business activity index advanced from 7.1 to 11.6, its highest reading since April. The company outlook index rose from 5.8 to 8.7, with 21 percent of respondents reporting that their outlook improved from last month and 12 percent noting they worsened.
Selling prices and wages rose faster in December. The selling prices index edged up from 6 to 7.4. The wages and benefits index moved up from 10.1 to 15.8.
Respondents were markedly more optimistic about expectations regarding future business conditions than last month. The index of future general business activity advanced 5 points to 11.7, and the index of future company outlook rose sharply from 1.4 to 16.8, its highest reading in three months. Indexes of future service sector activity, such as future revenue and employment, rose in December and remained in solid positive territory.
TSSOS also includes a component called the Texas Retail Outlook Survey, which uses information from respondents in the retail and wholesale sectors only.
Retail sales increased in December, according to the survey. The sales index came in at 7.6, similar to last month, suggesting the pace of growth was unchanged.
Labor market indicators in the retail and wholesale sectors reflected continued employment growth and longer workweeks. The employment index edged up from 6.7 to 7.1 in December. The hours worked index advanced from 0.7 to 7.7.
Retail prices and wages increased in December. The selling prices index held steady at a reading of 20.9. The wages and benefits index rose from 8.6 to 13, reflecting faster compensation growth, although the great majority of respondents continued to note no change in labor costs.
Federal Reserve Bank of Dallas