According to the Texas Service Sector Outlook Survey, growth in the Texas service sector expanded at a faster pace in July, with the revenue index reaching its highest level in 16 months. Labor market indicators showed steady employment growth and longer workweeks, while price and wage pressures eased modestly. However, the general business activity index remained negative but increased, and perceptions of broader business conditions were mixed.
“Labor market indicators pointed to steady employment growth and longer workweeks, while price and wage pressures eased modestly," Jesus Cañas, Dallas Fed senior business economist, told the Federal Reserve Bank of Dallas website. "Perceptions of broader business conditions were mixed in July.”
According to business executives who participated in the Texas Service Sector Outlook Survey, growth in the state's service sector activities accelerated in July. To reach 12.9, the revenue index increased by nine points, marking its highest point in 16 months. The employment index stayed at 9.2, reflecting a similar increase in employment from the prior month. The selling prices index decreased three points to 9.9 and the input prices index decreased one point from 35.0 to 31.7, but both indices were still higher than their respective series averages of 27.7 and 7.6. The earnings and benefits index decreased two points to 16.7, remaining marginally higher than its mean reading of 15.7. The general business activity index increased four points to -4.2, where it now stands.The corporate outlook index increased to 0.5, and the near-zero value showed that in July company outlooks were mainly stable and no longer deteriorating.
"Labor market indicators (reflected) slower employment growth and continued shortening of workweeks in July," Cañas said, according to the Federal Reserve Bank of Dallas website. "Retailers' perceptions of the overall business environment deteriorated."
The sales index increased by five points to -2.4, indicating that sales decreased more slowly than they did the month before. The hours worked index decreased from -2.3 to -7.6, while the employment indicator dropped by nine points to 3.2. The business expectations index dropped 10 points to -10.4.
Texas business executives were given additional questions about the job market for this month's study. The Dallas Fed conducts the poll on a monthly basis to get a timely evaluation of the state's service sector, which accounts for almost 70% of the state's economy and employs approximately 9.5 million people.
