Dallas Fed: Growth in service activity continues as price and wage pressures pick up in August
August 29, 2023
DALLAS—Texas service sector activity expanded at a slightly faster pace in August than the prior month, according to business executives responding to the Texas Service Sector Outlook Survey.
“Labor market indicators pointed to steady growth in employment and workweeks, while price and wage pressures increased,” said Jesus Cañas, Dallas Fed senior business economist. “Perceptions of broader business conditions worsened slightly.”
Key takeaways from the service sector survey:
- The revenue index rose three points to 16.2.
- The employment index remained at 9.3, indicating the same employment growth rate as the previous month.
- The input prices index rose from 31.7 to 37.8, and the selling prices index rose four points to 14.2. Both indexes remained above their series averages.
- The wages and benefits index increased four points to 20.4, the highest level since January and above its average reading of 15.8.
- The general business activity index increased two points but remained negative at -2.7.
- The company outlook index edged down to -1.2.
Texas retail sales hold steady
“Retail sales were flat,” Cañas said. “Labor market indicators reflected steady growth in employment and continued shortening of workweeks. Retailers’ perceptions of broader business conditions continued to worsen, though pessimism waned.”
Key takeaways from the retail survey:
- The sales index inched up from -2.4 to -0.6, with the near-zero reading suggestive of no change in sales from last month.
- The employment index was unchanged at 3.0.
- The company outlook index rose six points to -4.5.
For this month’s survey, Texas business executives were asked supplemental questions on wages, prices and the impact of the recent heat wave.
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 DallasFed.org.