Dallas Fed: Growth slows in Texas service sector
June 27, 2023
DALLAS—Growth in Texas service sector activity slowed in June, according to business executives responding to the Federal Reserve Bank of Dallas Texas Service Sector Outlook Survey.
“Labor market indicators pointed to faster employment growth, however,” said Jesus Cañas, Dallas Fed senior business economist. “Input price and wage pressures increased modestly, while selling price pressures were flat. Looking ahead, perceptions of broader business conditions continued to worsen in June, but pessimism around the outlook waned.”
Key takeaways from the service sector survey:
- The revenue index fell from 6.9 to 3.6, suggesting activity grew at a slower rate than the previous month.
- The employment index increased five points to 9.2, indicating an acceleration in employment growth in June.
- The input prices index ticked up from 31.8 to 35.0, and the selling prices index was generally unchanged at 12.8. Both indexes remained above their series averages.
- The wages and benefits index inched up two points to 18.6, still above its average reading of 15.7.
- The general business activity index remained negative but rose nine points to -8.2.
- The company outlook index increased to -1.4, with the near-zero figure indicating company outlooks were no longer worsening and held mostly steady in June.
Texas Retail Sales Decline
“Retail sales declined again in June. However, retail labor market indicators reflected a rebound in employment growth,” Cañas said. “Price pressures increased, but wage pressures eased. Looking forward, retailers’ perceptions of broader business conditions stabilized in June.”
Key takeaways from the retail survey:
- The sales index fell four points to -7.2.
- The employment index jumped 16 points to 12.2, and the part-time employment index increased 11 points to 2.1.
- The selling prices index rose seven points to 15.2, and the input prices index ticked up two points to 26.6. However, the wages and benefits index dropped four points to 17.9.
- Both the general business activity index and the company outlook index moved up to near-zero readings, indicating conditions and outlooks were no longer worsening but held steady in June.
For this month’s survey, executives in both manufacturing and the service sector responded to special questions on outlook concerns, employment and capital expenditures.
The Dallas Fed conducts the survey monthly to obtain a timely assessment of activity in the state’s service sector, which represents almost 70 percent of the state’s economy and employs about 9.5 million workers.
For more information, visit www.dallasfed.org.
Federal Reserve Bank of Dallas