Dallas Fed: Growth in Texas service activity moderates
September 26, 2023
DALLAS—Texas service sector activity expanded at a slower pace in September, according to business executives responding to the Texas Service Sector Outlook Survey.
“Labor market indicators pointed to slower growth in employment and modest growth in work hours,” said Jesus Cañas, Dallas Fed senior business economist. “Selling price pressures and wage growth eased, but input prices pressures were relatively unchanged. Perceptions of broader business conditions worsened in September.”
Key takeaways from the service sector survey:
- The revenue index fell eight points to 8.7.
- The employment index fell from 9.3 to 2.7, its lowest level in six months.
- The input prices index was flat at 37.6 while the selling prices index fell four points to 9.8, though both indexes remained above their respective series averages.
- The wages and benefits index fell two points to 18.5 but continued to exceed its average reading of 15.8.
- The general business activity index fell six points to -8.6 while the company outlook index edged down to -4.4.
Texas retail sales decline
“Retail sales declined in September,” Cañas said. “Retail labor market indicators reflected flat employment and workweeks. Retailers’ perceptions of broader business conditions were mixed.”
Key takeaways from the retail survey:
- The sales index fell from -0.6 to -4.4, marking its fifth consecutive month in negative territory.
- The employment index ticked down from 3.0 to 0.6, with the near-zero reading suggestive of no change in employment.
- The general business activity index dropped from -4.0 to -10.2, while the company outlook index increased from -4.5 to 2.1.
For this month’s survey, Texas business executives were asked supplemental questions on remote work and the impact of recent federal government legislation.
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