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Dallas Fed: Texas service sector activity declines in November

DALLAS—Texas service sector activity contracted in November, according to business executives responding to the Texas Service Sector Outlook Survey.

“Texas service sector activity contracted in November for the first time since December 2022,” said Jesus Cañas, Dallas Fed senior business economist. “However, labor market indicators pointed to a pickup in employment growth and a largely stable workweek. Input price pressures eased while selling price pressures picked up slightly. Wage growth remained unchanged. Respondents continued to perceive worsening broader business conditions, though pessimism waned slightly.”

Key takeaways from the service sector survey:

  • The revenue index fell three points to -2.4. 
  • The employment index increased from 0.1 to 5.7.  
  • The input prices index fell five points to 32.1 and the selling prices index increased two points to 11.3, both indexes remained above their respective series averages of 27.9 and 7.7.
  • The wages and benefits index was flat at 16.8, approaching its average reading of 15.8.     
  • The general business activity index improved from -18.2 to -11.6, while the company outlook index increased from -12.8 to -8.1.

Texas Retail Sales Decline   
“Retail sales declined in November while retail labor market indicators reflected a pickup in employment growth,” Cañas said.
Key takeaways from the retail survey:

  • The sales index remained in negative territory but increased from -18.1 to -11.6, indicating retail sales fell at a slower pace than the previous month.
  • The employment index increased 18 points to 5.4 while the part-time employment index rose nine points to 3.6.   
  • The general business activity index improved from -23.0 to -11.8.

For this month’s survey, Texas business executives were asked supplemental questions on expected demand and operating margins.

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.

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Media contact:
Jon Prior
Federal Reserve Bank of Dallas
Phone: 214-922-6857