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Texas Service Sector Activity Expands in June, Says Dallas Fed Survey

For immediate release: June 28, 2016

DALLASTexas service sector activity picked up in June, 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—advanced from 5.8 in May to 15.6 in June, its highest reading in 11 months.

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 4.5 in May to 2.0 in June. The hours worked index rebounded to positive territory, rising five points to 3.6.

Perceptions of broader economic conditions were mixed in June. The general business activity index was similar to May at –7.7, its sixth consecutive negative reading. The company outlook index rose slightly from –2.9 to reading near zero.

Expectations regarding future business conditions were mixed in June. The index of future general business activity dipped from 1.3 to a reading near zero. The index of future company outlook rose slightly from 6.3 to 8.4, reflecting more optimism. Indexes of future service sector activity, such as future revenue and employment, continued to reflect 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 increased modestly in June, according to business executives responding to the Texas Retail Outlook Survey. After dipping into negative territory last month, the sales index rose six points to 3.2.

Retailers’ perceptions of broader economic conditions were mixed in June. The general business activity index remained negative for a third consecutive month but moved up from –13.3 to –10.2. The company outlook index rebounded from a negative reading last month to 3.2 in June.

Indexes of future retail sector activity continued to reflect optimism this month.

For this month’s Texas Business Outlook Surveys, respondents were also asked supplemental questions on the impact of lower energy prices and concerns affecting the outlook of their company.

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Media contact:
Justin Jones
Federal Reserve Bank of Dallas
Phone: 214-922-5449
Email: Justin.Jones@dal.frb.org