Texas service sector activity increases at slower pace as outlook worsens in May, says Dallas Fed survey
For immediate release June 1, 2016
DALLAS—Texas service sector activity continued to reflect expansion in May, according to the Federal Reserve Bank of Dallas’ Texas Service Sector Outlook Survey (TSSOS).
The revenue index—a key measure of state service sector conditions—moved down from 10.6 in April to 5.8 in May, its lowest reading in a year.
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 8.2 million workers.
Positive readings in the survey generally indicate expansion of service sector activity, while readings below zero generally indicate contraction.
The employment index remained positive but edged down from 6.3 in April to 4.5 in May, indicating slower employment growth. The hours worked index fell almost 4 points into negative territory to –1.3.
Perceptions of broader economic conditions worsened in May. The general business activity index was negative for a fifth consecutive month, declining from –3.7 in April to –7.1 in May. The company outlook index retreated 10 points into negative territory to –2.9.
Expectations regarding future business conditions reflected less optimism in May. The index of future general business activity inched down from 2.3 to 1.3. The index of future company outlook fell from 14.6 to 6.3. Indexes of future service sector activity, such as future revenue and employment, also reflected less optimism 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 fell in May, according to business executives responding to the Texas Retail Outlook Survey. The sales index retreated almost 10 points back into negative territory to –2.8.
Retailers’ perceptions of broader economic conditions declined in May. The general business activity index remained negative for a second consecutive month and edged down further from –11.4 to –13.3. The company outlook index dropped almost 6 points into negative territory to –1.6.
Indexes of future retail sector activity reflected less optimism this month.
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Media contact:
Justin Jones
Federal Reserve Bank of Dallas
Phone: (214) 922-5449
Email: Justin.Jones@dal.frb.org