July 1, 2025
Texas service sector activity continues to decline
Texas service sector activity remained in contractionary territory in June, according to business executives responding to the Texas Service Sector Outlook Survey. The revenue index, a key measure of state service sector conditions, held fairly steady at -4.1, suggesting revenue declined at about the same pace as in May.
Labor market measures indicated employment and hours worked were largely unchanged again in June. The employment index edged down to -1.2, with the near-zero reading suggesting flat headcounts last month. The part-time employment index dipped to -1.7 from -0.7, while the hours-worked index came in at 0.0.
Perceptions of broader business conditions continued to worsen in June, though the indexes were less negative than the prior month. The company outlook index increased six points to -2.4, and the general business activity index also rose six points to -4.4. The outlook uncertainty index came in at 19.7, similar to May’s reading and still well above the series average of 13.6.
Price and wage growth were stable in June. The selling prices index increased slightly to 6.8 from 5.2, but the input prices index held steady at 21.3. The wages and benefits index remained largely unchanged at 8.6, below its average value.
Respondents’ expectations regarding future business activity improved slightly in June. The future general business activity index edged up to 1.5 from -0.3. The future revenue index also rose. Other future service sector activity indexes, such as employment, increased, rising further into positive territory.
July 1, 2025
Texas retail sales contract further
Retail sales continued to decline in June, according to business executives responding to the Texas Retail Outlook Survey. The sales index, a key measure of state retail activity, was largely unchanged at -29.5. Retailers’ inventories shrunk, with the index remaining in negative territory at -2.8 in June.
Retail sector labor market indicators suggested a continued contraction in employment and hours worked. The employment index was little changed at -9.0, and the part-time employment index ticked down slightly to -4.9, both negative readings suggesting a decline in hiring. Meanwhile, the hours worked index plunged 10 points to -14.1.
Perceptions of broader business conditions deteriorated further in June. Both the general business activity index and company outlook index were little changed from May, remaining deep in negative territory at -24.4 and -24.2, respectively. The outlook uncertainty index held steady at 18.8, well above its series average of 11.4.
Selling price growth accelerated while input price and wage pressures eased. The selling prices index rose nine points to 14.1, pushing above its series average of 13.1. The input prices index dipped four points to a below-average reading of 17.5, while the wages and benefits index ticked down two points to -3.3.
Expectations for future retail activity were mixed but leaned more positive overall, suggesting the future outlook improved from May. While the future general business activity index dipped to -3.2 from -1.3, the future company outlook index moved up eight points to 4.3. The future sales index rose to 19.1, and the future employment index rose to 13.4. The future capital expenditures index also increased.
The Texas Retail Outlook Survey is a component of the Texas Service Sector Outlook Survey that uses information only from respondents in the retail and wholesale sectors.
Next release: July 29, 2025
Data were collected June 17–25, and 259 of the 371 Texas service sector business executives surveyed submitted responses. The Dallas Fed conducts the Texas Service Sector Outlook Survey monthly to obtain a timely assessment of the state’s service sector activity. 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 been seasonally adjusted as necessary.