One day after a report on weakness in the state's manufacturing sector, the Dallas Fed has another alarm bell on the state's economic future, News Radio 1200 WOAI reports.
The state's service sector growth is slowing, and many service sector executives are bearish on the future of their companies and their industry, according to the latest monthly survey.
The service sector is the largest sector of the private economy. Defined by economists as the producer of things that 'you can't hold in your hand,' the service sector encompasses everything from the media to banking to health care to power and water utilities.
For the first time in two months, perceptions of broader economic conditions turned negative, and uncertainty has increased.
"Perceptions of broader economic conditions turned negative, and uncertainty increased this month. The general business activity index fell over 16 points to -5.0, its lowest reading since early 2016, while the company outlook index saw a similar decline from 12.0 in November to -4.4 in December. The outlook uncertainty index rose to a new high of 15.0," the report said.
Price and wage pressures are easing, indicating that the service sector no longer thinks that wage and price inflation, despite the state's near record low unemployment rate, remain its top concern.
Predictions of revenue and employment in the executives' sectors also fell in December, but remain in positive territory.
Retail sales growth also weakened in December, despite the strong Christmas shopping season. The Dallas Fed says conditions are still positive, with employment levels and work weeks up, but the overall outlook is weaker among retailers.
"Retailers’ perceptions of broader economic conditions deteriorated notably in December. The general business activity index fell into negative territory, dropping over 24 points to -16.8. The company outlook index fell from 4.1 in November to -15.6 in December, its weakest reading in nearly a decade," the report said.
Retailers are all sellers of products, from mall stores to grocery outlets to car dealerships to wholesalers.