Texas Service Sector Activity Increases at Slower Pace as Outlooks Improve in May, Says Dallas Fed Survey
For immediate release: May 27, 2015
DALLAS—Texas service sector activity continued to reflect expansion in May but at a slower pace than in April, 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—dropped from 14.6 in April to 3.8 in May, its lowest reading in almost three years.
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 ticked up from 7.9 in April to 8.9 in May. The hours worked index remained positive but fell slightly from 4.7 in April to 1.9 in this month.
Perceptions of broader economic conditions improved in May. The general business activity index turned positive at 1.1 in May after two consecutive months in negative territory.
Indexes of future service sector activity reflected more optimism.
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 contracted in May, according to business executives responding to the Texas Retail Outlook Survey. The sales index plunged back into negative territory in May, dropping 31 points to its lowest reading, –10.7, in more than four years.
Indexes of future retail sector activity remained in solid positive territory this month.
Federal Reserve Bank of Dallas