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Texas Retail Sales Weaken

Texas Business reports: Retail sales fell in July, according to business executives responding to the Texas Retail Outlook Survey conducted by the Federal Reserve Bank of Dallas. 

The sales index moved down from 7 to -3.6, its first negative reading since May 2011. Inventories rose.

Labor market indicators reflected slightly less hiring and longer workweeks. The employment index edged down from 13.3 in June to 12.3 in July. The hours worked index climbed to 4.5 after being negative last month.

Perceptions of general business conditions worsened in July. The general business activity index turned negative for the first time in 10 months, falling 10 points to -6.5. The company outlook index also fell into negative territory, slipping to -5.6after a reading of 0.7 last month. Thirteen percent of respondents noted their company’s outlook had improved from the prior month, compared with 18 percent who reported their outlook had worsened.

Retail prices fell, but wage growth held steady. The selling prices index declined from 6.5 to -0.7, its first negative readingsince July 2010. The wages and benefits index came in at a reading of 5.8, similar to June. The great majority of respondents continued to note no change in labor costs.

Indexes of future retail sector activity remained in positive territory in July. Perceptions of future economic conditions stayed positive and have been stable for the last three months. The index of future general business activity moved down about two points, while the index of future company outlook held steady.

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 July 17–25, and 221 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.