Dallas Fed: Slower retail sales dent growth

A modest decline in retail sales cooled the ongoing growth of the regional economy in recent weeks, but widespread demand and the continued resurgence of the energy and manufacturing sectors helped drive activity, according to a report Wednesday from the Federal Reserve Bank of Dallas.

In its chapter of the Beige Book, an anecdotal report on the economy compiled every six weeks by the Federal Reserve banks, the Dallas Fed said the economy in its district expanded at a “moderate” pace — slower than the “robust” growth noted in the prior report.

The Dallas Fed’s district includes all of Texas and parts of New Mexico and northern Louisiana. Texas accounts for more than 95 percent of the economic activity in the region.

The lighter retail activity appeared to stem primarily from poor weather conditions and a leveling of auto sales after several strong years, the report said. Contacts said Internet sales continued to rise, with one wholesaler noting that a loss in brickand-mortar sales was offset by online sales gains.

Despite the slower sales, retailers joined regional factories and a broad range of services companies to drive hiring throughout the region – despite growing difficulty finding the right applicants.

“Widespread reports of labor market tightness and difficulty finding qualified workers continued,” the report said, “and more firms responded by raising wages than in prior reporting periods.”

The wage hikes came in part because of a growing ability for companies to pass through the cost increases, according to this and other Fed reports.

Factories across the district reported their strong expansion