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Texas Service Sector Activity Continues to Expand in February; Retail Sales Increase at a Slower Pace, Says Dallas Fed Survey

For immediate release: February 23, 2015

DALLASTexas service sector activity continued to reflect expansion in February, 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—edged up from 12.1 in January to 13.6 in February but remained below its 2014 average.

The survey is conducted monthly by the Dallas Fed to obtain a timely assessment of activity in the state’s service sector, which represents almost 70 percent of the state economy and employs close to 7.6 million workers.

Positive readings in the survey generally indicate expansion of service sector activity, while readings below zero generally indicate contraction.

Labor market indicators reflected faster employment growth and slightly longer workweeks. The employment index rose from 5.8 to 12 in February, indicating hiring picked up pace this month. The hours worked index was unchanged at 1.4 this month, suggesting work hours increased at the same pace as in January.

Perceptions of broader economic conditions reflected slightly more optimism in February. The general business activity index rebounded from a negative reading last month to 1.7.

Indexes of future service sector activity remained in solid positive territory this month.

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 at a slower pace in February, according to business executives responding to the Texas Retail Outlook Survey. The sales index remained positive but dipped from 10.6 to 6.8 in February.

Indexes of future retail sector activity were mixed this month.

For this month’s Texas Business Outlook Surveys, respondents were also asked supplemental questions on employment expectations and the labor market in Texas.

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Media contact:
Justin Jones
Phone: (214) 922-5449
Email: justin.jones@dal.frb.org