Texas service sector sees significant acceleration in February

Staff

Activity in the Texas service sector picked up sharply in February, according to business executives responding to the Texas Service Sector Outlook Survey. The revenue index, a key measure of state service sector conditions, increased from 2.8 in January to 21.9 in February.

Labor market indicators point to an acceleration in the pace of growth in hiring and hours worked.

The employment index increased from 9.2 to 14.6, while the part-time employment index added three points to rise to 6.5. The hours worked index picked up from 7.4 in January to 10.4 in February.

February retail sales activity climbed back into positive territory after a decline in January, according to business executives responding to the Texas Retail Outlook Survey.

The sales index, a key measure of state retail activity, surged 18 points to 10.2 in February—above its average over the past 12 months. Firms noted continued inventory declines, though at a slower pace, as the inventories index increased from -10.0 to -2.1.

Retail labor market indicators were strongly positive in February, with a faster pace of hiring and longer average workweek hours.

The employment index added five points to rise to 11.0—its best reading since 2018—while the part-time employment index increased from 1.6 to 8.4. The hours worked index rebounded from negative territory to 10.6, its highest level since before the pandemic.

For this month’s survey, Texas business executives were asked supplemental questions on supply-chain disruptions.

Source: Federal Reserve Bank of Dallas