Texas service sector activity increased at a slower pace in April, says Dallas Fed survey

For Immediate Release: April 25, 2017

DALLAS—Texas service sector activity increased in April, albeit at a slower pace than in March, according to the Federal Reserve Bank of Dallas’ Texas Service Sector Outlook Survey (TSSOS).

The revenue index—a key measure of state service sector conditions—edged down three points to 12.1 in April.

“The Texas private service sector continues its trend of solid growth in April and at a faster pace than in the first four months of last year, despite a slightly slower pace of growth than last month,” said Dallas Fed economist Amy Jordan. “Texas retail sales are regaining momentum with sales increasing for the sixth consecutive month.”

The survey is conducted monthly by the Dallas Fed to obtain a timely assessment of activity in the state’s service sector, which represents almost 70 percent of the state economy and employs about 8.4 million workers.

Positive readings in the survey generally indicate expansion of service sector activity, while readings below zero generally indicate contraction.

Labor market indicators reflected slower employment growth and slightly longer workweeks this month. The employment index remained positive but fell from 8.1 to 4.5. The hours worked index dipped three points to 3.5.

Perceptions of broader economic conditions continued to reflect optimism in April. The general business activity index fell from 13.2 to 9.0. The company outlook index was relatively unchanged from last month at 10.9.

Respondents’ expectations regarding future business conditions reflected slightly less optimism in April. The index of future general business activity ticked down to 20.6. The index of future company outlook edged down three points to 25.3.

TSSOS also includes a component called the Texas Retail Outlook Survey, which uses information from respondents in the retail and wholesale sectors only.

Retail sales picked up in April, according to business executives responding to the Texas Retail Outlook Survey. The sales index rose three points to 13.7 in April.

Retailers’ perceptions of broader economic conditions continued to reflect optimism in April. The general business activity index came in at a reading of 2.6, similar to March. The company outlook index rebounded from negative territory to 9.4.

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Media contact:
Alexander Johnson
Federal Reserve Bank of Dallas
Phone: (214) 922-5288
E-mail: alexander.johnson@dal.frb.org