Dallas Fed: Texas service sector activity slips back into contraction

DALLAS—Growth in Texas service sector activity contracted slightly in January, according to business executives responding to the Federal Reserve Bank of Dallas’ Texas Service Sector Outlook Survey.

“Growth in Texas service sector activity contracted slightly in January; however, labor market measures suggest continued employment growth,” said Jesus Cañas, Dallas Fed senior business economist. “Input and selling price pressures eased while wage growth remained unchanged. Respondents continued to perceive worsening broader business conditions.”

Key takeaways from the service sector survey: 

• The revenue index fell eight points to -3.6. 
• The employment index held mostly steady at 2.5.
• The input prices index fell two points to 33.6 and the selling prices index fell four points to 8.7
• The wages and benefits index was mostly unchanged at 17.0.
• The general business activity index was largely unchanged at -9.3, while the company outlook index fell from -0.2 to -4.9.

Texas retail sales fall

“Retail sales fell at a considerably faster rate than the previous month while labor market indicators reflected a contraction in employment in January,” Cañas said.

Key takeaways from the retail survey:

• The sales index dropped from -2.2 to -28.6.
• The employment index fell from 4.2 to -8.4.
• The general business activity index remained in deep negative territory at -25.4. 

Data were collected Jan. 16–24, and 287 Texas service sector business executives, of which 58 were retailers, responded to the survey.

Forh this month’s survey, Texas business executives were asked supplemental questions on labor.

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:
James Hoard
Federal Reserve Bank of Dallas
Phone: 214-922-5307
Email: james.hoard@dal.frb.org