Dallas Fed: Modest growth continues in Texas service sector

DALLAS—Texas service sector activity expanded at a modest pace in March, according to business executives responding to the Federal Reserve Bank of Dallas’ Texas Service Sector Outlook Survey.

“Despite the expansion, labor market measures suggested no growth in employment,” said Jesus Cañas, Dallas Fed senior business economist. “Selling price pressure remained unchanged, while input price pressures eased. Wage growth accelerated slightly. Respondents in March continued to perceive worsening broader business conditions.”

Key takeaways from the service sector survey:

• The revenue index held mostly steady at 4.0.
• The employment index fell five points to -1.2.
• The selling price index was unchanged at 7.7, while the input price index fell from 34.3 to 30.4.
• The wages and benefits index increased four points to 19.5.
• The general business activity index fell two points to -5.5. The company outlook index fell from 3.8 to -0.1.

Texas retail sales decline

“Retail sales activity declined in March, but at a slightly slower pace than last month. Labor market indicators reflected contraction in employment growth,” Cañas said.

Key takeaways from the retail survey:

• The sales index increased from -5.3 to -3.4.
• The employment index fell from 2.4 to -5.0.
• The general business activity index increased two points but remained in negative territory at -15.6.

Data were collected March 12–20, and 276 Texas service sector business executives responded to the survey.

For this month’s survey, Texas business executives were asked supplemental questions on prices, wages and outlook.

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