Texas Business reports: Retail sales increased in September, according to business executives responding to the Texas Retail Outlook Survey. The sales index rose from 17.7 to 22.3, its highest reading in 12 months. Inventories rose.

Labor market indicators reflected continued hiring and longer workweeks. The employment index moved up from 8.1 to 11.9 in September. The hours worked index rose from 3.4 to 7.5.

Perceptions of general business conditions improved notably in September. The general business activity index advanced from 15.2 to 21.7, its best reading since February. The company outlook index rose sharply from 3.7 to 15.7 in September. Twenty-five percent of respondents noted their company’s outlook had improved from the prior month, compared with 9 percent who reported their outlook had worsened.

Retail price and wage pressures were not much changed in September. The selling prices index remained high but dipped to 20.9 from 22.4. The wages and benefits index edged up from 5.5 to 7.1, although the great majority of respondents noted no change in labor costs.

Indexes of future retail sector activity remained in positive territory, and most of them increased in September. Perceptions of future economic conditions also improved. The index of future general business activity moved up nearly 10 points to 23.4, while the index of future company outlook climbed from 21.1 to 29.9.

The Texas Retail Outlook Survey (TROS) is a component of the TSSOS that uses information only from respondents in the retail and wholesale sectors.

The Dallas Fed conducts the Texas Service Sector Outlook Survey monthly to obtain a timely assessment of the state’s service sector activity. Data were collected Sept. 11–19, and 245 Texas business executives responded to the survey. 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 beenseasonally adjusted as necessary.

Next release: October 30, 2012