Texas service sector activity picks up in October, says Dallas Fed survey

For Immediate Release: October 31, 2017

DALLAS—Texas service sector activity increased again in October, 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— rose from 15.9 in September to 19.2 in October, its highest reading this 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 about 8.5 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 longer workweeks this month. The employment index moved up from 3.5 to 8.3. The hours worked index rose five points to 7.8.

Perceptions of broader economic conditions reflected more optimism in October. The general business activity index advanced six points to 18.6. The company outlook index rose from 7.7 to 16.4.

Respondents’ expectations regarding future business conditions also reflected more optimism in October. The index of future general business activity rose slightly from 28.0 to 30.5. The index of future company outlook moved up three points to 32.4.

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 continued to expand in October, albeit at a slower pace than last month, according to business executives responding to the Texas Retail Outlook Survey. The sales index remained positive but fell 15 points to 17.7.

Labor market measures indicated faster employment growth and longer workweeks this month. The employment index rose seven points to 8.0, suggesting retailers added jobs on net. The hours worked index edged up from 5.1 to 7.5.

Retailers’ perceptions of broader economic conditions continued to reflect optimism in October. The general business activity index rose slightly from 19.3 to 22.0. The company outlook index edged down three points to 19.6.

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Media contact:
Jennifer Chamberlain
Federal Reserve Bank of Dallas
Phone: (214) 922-6748
E-mail: jennifer.chamberlain@dal.frb.org