Dallas Fed: Texas service sector activity accelerates
August 01, 2023
DALLAS—Growth in Texas service sector activity expanded at a faster pace in July, according to business executives responding to theTexas Service Sector Outlook Survey.
“Labor market indicators pointed to steady employment growth and longer workweeks, while price and wage pressures eased modestly,” said Jesus Cañas, Dallas Fed senior business economist. “Perceptions of broader business conditions were mixed in July.”
Key takeaways from the service sector survey:
- The revenue index grew nine points to 12.9, the highest level in 16 months.
- The employment index remained at 9.2, indicating the same employment growth as the previous month.
- The input prices index ticked down from 35.0 to 31.7, and the selling prices index fell three points to 9.9, though both indexes remained above their series averages, 27.7 and 7.6 respectively.
- The wages and benefits index inched down two points to 16.7—still slightly above its average reading of 15.7.
- The general business activity index remained negative but increased four points to -4.2.
- The company outlook index increased to 0.5, with the near-zero figure indicating company outlooks were no longer worsening and held mostly steady in July.
Texas retail sales decline
“Labor market indicators reflected slower employment growth and continued shortening of workweeks in July,” Cañas said. “Retailers’ perceptions of broader business conditions worsened.”
Key takeaways from the retail survey:
- The sales index improved five points to -2.4 suggesting sales fell at a slower rate than the previous month.
- The employment index fell nine points to 3.2, and the hours worked index fell from -2.3 to -7.6.
- The company outlook index fell 10 points to -10.4.
For this month’s survey, Texas business executives were askedsupplemental questions on the labor market.
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.
Federal Reserve Bank of Dallas