Growth stalls in Texas service sector while price pressures continue easing, according to Dallas Fed survey

DALLAS—Growth in Texas service sector activity slowed in April, and retail sales declined, according to business executives responding to the Texas Service Sector Outlook Survey.

“Growth in Texas service sector activity slowed in April while labor market measures suggested a slight contraction in employment,” said Jesus Cañas, Dallas Fed senior business economist. “Respondents continued to perceive worsening broader business conditions. On a positive note, price and wage pressures eased this month.”

Key takeaways from the service sector survey:

• The revenue index fell from 4.0 to 0.3, with the near-zero reading suggestive of flat output growth.
• The employment index fell from -1.2 to -2.6.
• The selling price index fell four points to 3.9 while the input price index fell from 30.4 to 28.8.
• The wages and benefits index decreased five points to 14.2.
• The general business activity index remained negative and fell five points to -10.6. The company outlook fell slightly from -0.1 to -1.8.

Texas retail sales decline

“Retail sales activity declined in April, and retail labor market indicators indicated no growth in employment,” Cañas said.

Key takeaways from the retail survey:

• The sales index fell from -3.4 to -10.4, indicating retail sales fell at a faster rate than the previous month.
• The employment index increased from -5.0 to -0.5, with the near-zero reading suggesting flat employment in April.
• The general business activity index fell two points to -18.0.

Data were collected April 16–24, and 285 Texas service sector business executives responded to the survey.

For this month’s survey, Texas business executives were asked supplemental questions on artificial intelligence.

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