What’s New This Month
For this month’s survey, Texas business executives were asked supplemental questions on the labor market. Results for these questions from the Texas Manufacturing Outlook Survey, Texas Service Sector Outlook Survey and Texas Retail Outlook Survey have been released together.
Read the special questions results.
The Texas service sector continued to grow in November, though at a slightly slower rate, according to business executives responding to the Texas Service Sector Outlook Survey.
The revenue index, a key measure of state service sector conditions, decreased from 15.4 in October to 12.2 in November.
Labor market indicators reflected somewhat slower employment growth and slightly longer work weeks this month.
The employment index decreased from 9.1 to 7.0, suggesting a slight deceleration in hiring, while the hours worked index ticked up to 2.9. Part-time employment decreased, however, with the index declining to -2.2—its lowest reading since 2015.
Perceptions of broader business conditions continued to improve. The general business activity index increased nearly three points to 4.7, while the company outlook index was unchanged at 10.3. The outlook uncertainty index declined to a nine-month low of 11.2.
Wage pressures eased in November, while price pressures were mostly unchanged. The wages and benefits index slipped from 19.9 to 16.2. The selling prices index ticked up slightly from -1.0 to 0.7, suggesting no net change in prices compared with October; the input prices index was steady at 24.7.
Respondents’ expectations regarding future business conditions were significantly improved in November. The future company outlook index surged nearly seven points to 17.6, while the future general business activity index picked up over eight points to 8.5.
Other indexes of future service sector activity, such as revenue and employment, remained in solidly positive territory, suggesting expectations of continued growth over the next six months.
Retail Sales Continue to Grow
Growth in retail sales remained solid but decelerated slightly in November, according to business executives responding to the Texas Retail Outlook Survey.
The sales index fell slightly from 7.5 to 6.2. Inventories stabilized, with the inventories index increasing six points to -0.5.
Retail labor market indicators were somewhat mixed in November, as respondents indicated faster overall employment growth and similar workweek length compared with October.
The employment index rose nearly three points to 7.6, while the part-time employment index fell nearly 10 points to -6.2—its weakest reading since January.
The hours worked index improved from -11.2 to -0.9, indicating no net change in average workweek length.
Retailers’ perceptions of broader business conditions reflected optimism in November. The general business activity index spiked nearly 10 points to 9.6, its best reading this year.
The company outlook index moderated from 11.1 to 5.4, while the outlook uncertainty index was mostly unchanged at 14.3.
Retail price and wages pressures picked up in November. The input prices index surged over nine points to 20.9, while the selling prices index rose over six points to 17.7. The wages and benefits index inched up one point to 13.8.
Retailers’ perceptions of future business conditions were improved this month. The future general business activity index picked up from -7.2 to 1.4, while the future company outlook index was mostly unchanged at 4.6.
However, other indexes of future retail activity such as sales and employment weakened notably, suggesting mixed expectations for continued growth over the next six months.
The Texas Retail Outlook Survey is a component of the Texas Service Sector Outlook Survey that uses information only from respondents in the retail and wholesale sectors.
Data collected November 12–20, and 219 Texas service sector and 49 retail sector business executives responded to the survey.
The Dallas Fed conducts the Texas Service Sector Outlook Survey monthly to obtain a timely assessment of the state’s service sector activity.
Firms are asked whether revenue, employment, prices, general business activity and other indicators increased, decreased or remained unchanged over the previous month.
Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase.
When the share of firms reporting an increase exceeds the share reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the prior month.
If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the prior month.
An index will be zero when the number of firms reporting an increase is equal to the number of firms reporting a decrease. Data have been seasonally adjusted as necessary.