Service sector rises; retail pace is slower
The Texas service sector saw an uptick of activity in April, following the wide availability of vaccinations and the loosening of restrictions, according to business executives responding to a survey conducted by the Federal Reserve Bank of Dallas.
The revenue index, a key measure of state service sector conditions, rose from 21.6 in March to 26.1 in April. A positive number indicates growth, whereas a negative reading indicates a contraction.
“The rebound in the Texas service sector accelerated in April, with revenue growth reaching its quickest pace since 2014,” said Christopher Slijk, Dallas Fed associate economist. “Optimism surged among businesses, with the company outlook and general business indexes rising to their best readings since the survey’s inception in 2007.”
Labor market indicators suggest faster employment growth and longer workweeks in April. The employment index rose from 13.1 to 16.8, its highest reading in almost three years.
The hours-worked index went up more than five points to an all-time high of 13.4, with 18 percent of firms reporting more hours worked among their staff compared with March.
Employers also seem to be more optimistic about the future. Only 6.2 percent said the outlook of their business worsened, while 35.4 percent reported improvement. The remaining respondents said there was no change. This is improved from this time last year, when 73 percent of respondents said their outlook worsened.
Retail sales activity also continued to increase, but at a slower pace in April, according to executives responding to the survey. The sales index, a leading indicator of state retail activity, fell from 19.6 in March to 9.7 in April.
Inventories continued to fall sharply, with the inventories index contracting to an eightmonth low of -14.8.
Despite these contractions, the employment index climbed over six points to 10.9, with over 15 percent of respondents reporting increased employment compared with March. The hours worked index increased from 0.9 to 5.7, its highest reading in over a year.