Texas service sector activity continued to expand in September, according the Federal Reserve Bank of Dallas' Texas Service Sector Outlook Survey.
The revenue index, a key measure of state service sector conditions, increased to a four-year high of 26.9 from 21.5 in August.
Labor market indicators reflected continued employment growth and longer workweeks this month. The employment index increased to 13.8 from 11.5 while the hours worked index declined but remained positive at 6.9.
“Perceptions of broader economic conditions reflected more optimism despite ongoing uncertainty,” the Fed said. “Both the general business activity index, which increased to 25.6, and the company outlook index, which rose to 21.2, reached their highest levels since 2014. The outlook uncertainty index fell from 11.3 to 9.0 but was above its average for the year thus far.”
Price and wage pressures remained elevated this month. The wages and benefits index fell nearly four points to 21.6 while the selling price index inched up to 15.4 in September from 14.2 in August.
“Respondents’ expectations regarding future business conditions remained strongly positive. The future general business activity index was largely unchanged at 28.1, while the future company outlook index fell slightly to 28.1. Indexes of future service sector activity, such as revenue and employment, also reflected heightened expectations for future growth,” the Fed said.
The Dallas Fed serves the Eleventh Federal Reserve District, which consists of Texas, northern Louisiana and southern New Mexico.
