Texas Service Sector Activity Strengthens, Retail Sales Fall in July, Says Dallas Fed Survey
For Immediate Release: August 1, 2017
DALLAS—Texas service sector activity continued to expand in July, 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—edged up one point to 15.7 in July.
“Texas service sector activity strengthened overall in July, despite falling retail sales,” said Amy Jordan, Dallas Fed assistant economist. “One area we’ve heard about contributing to the slowdown in retail is wholesale of downstream energy-related products. With sales declining in July and slowing growth the previous two months, retailers held employment levels steady on net in July.”
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 about 8.4 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 slower employment growth and longer workweeks this month. The employment index moved down four points to 7.5. The hours worked index rose from 4.3 to 8.1.
Perceptions of broader economic conditions continued to reflect optimism in July. The general business activity index held steady at 10.5. The company outlook index fell from 14.2 to 7.9.
Respondents’ expectations regarding future business conditions also continued to reflect optimism in July. The index of future general business activity rose slightly from 21.1 to 23.0. The index of future company outlook fell three points to 23.1.
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 July for the first time in nine months, according to business executives responding to the Texas Retail Outlook Survey. The sales index moved down five points to –1.1 in July. Inventories increased at a slower pace this month.
Labor market indicators were mixed this month. The employment index plunged 10 points to a reading near zero, suggesting retail employment was unchanged on net. The hours worked index rebounded to positive territory to a reading of 3.3.
Retailers’ perceptions of broader economic conditions reflected less optimism in July. The general business activity index fell from 9.6 to 4.3. The company outlook index retreated to a reading near zero.
Federal Reserve Bank of Dallas
Phone: (214) 922-6748