Texas service sector activity picks up in March; retail sales rebound, says Dallas Fed survey
For Immediate Release: March 27, 2018
DALLAS—Texas service sector activity strengthened 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, rose from 13.2 in February to 19.3 in March. Perceptions of broader economic conditions continued to reflect optimism in March. The general business activity index fell four points to 13.5. The company outlook index rose from 12.9 to 16.8.
“Growth in the Texas private service sector remained strong and picked up this month as firms’ outlooks improved,” said Amy Jordan, Dallas Fed assistant economist. “Part of the increase in activity came from a rebound in retail sales, which grew for the first time this year. Services hiring rose back to the rate seen at the end of last year—the highest reading in this index in more than three years—and wage pressures remained robust.”
Here are some additional takeaways from this month’s report:
Labor market indicators reflected faster job growth. The employment index edged up three points to 15.1. The hours worked index moved up from 3.8 to 8.0.
Price and wage pressures remained elevated. The selling prices index remained largely unchanged at 15.7. The wages and benefits index edged down from 22.2 to 19.7.
TSSOS also includes a component called the Texas Retail Outlook Survey (TROS), which uses information from respondents in the retail and wholesale sectors only.
Key takeaways from this month’s TROS report include:
Retail sales improved notably in March. After two consecutive months of declines, the sales index surged 22 points to 13.0. Inventories increased at a markedly faster pace than last month.
Retail employment grew at a faster pace. The employment index rose from 12.1 to 16.7. The hours worked index moved up from 5.5 to 10.1.
Retail price pressures eased slightly, while wage pressures increased. The selling prices index fell from 31.8 to 28.2. The wages and benefits index rose five points to 24.9, although the majority of firms continued to note no change in compensation costs.
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 8.6 million workers. Positive readings in the survey generally indicate expansion of service sector activity, while readings below zero generally indicate contraction.
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Media contact:
Jennifer Chamberlain
Federal Reserve Bank of Dallas
Phone: (214) 922-6748
E-mail: jennifer.chamberlain@dal.frb.org