July 29, 2025
Growth resumes in Texas service sector activity
Texas service sector activity expanded in July after contracting for two consecutive months, according to business executives responding to the Texas Service Sector Outlook Survey. The revenue index, a key measure of state service sector conditions, increased 10 points to 6.3.
Labor market measures indicated employment and hours worked also grew in July. The employment index edged up to 2.8 from -1.2. The part-time employment index dipped to -3.8 from -1.7, while the hours worked index increased to 3.2.
Perceptions of broader business conditions were mixed in July. The general business activity index moved back into positive territory to 2.0 from -4.4, while the company outlook index remained negative but stable at -2.1. The outlook uncertainty index fell seven points to 12.8.
Input price and wage pressures increased, while selling price growth eased this month. The input prices index increased slightly to 25.3 from 21.3, but the selling prices index fell four points to 3.3. The wages and benefits index rose to 13.4 from 8.6 last month.
Respondents’ expectations regarding future business activity improved. The future general business activity index moved up to 9.8 from 1.5, while the future revenue index was relatively unchanged at 31.3. Other future service sector activity indexes, such as employment and capital expenditures also remained stable and in positive territory.
July 29, 2025
Texas retail sales stabilize after a two-month drop
Texas retail sales were flat in July, according to business executives responding to the Texas Retail Outlook Survey. The sales index, a key measure of state retail activity, increased to 0.8 from -29.5, with the near-zero reading suggesting little change in sales from June. Retailers’ inventories fell for the sixth consecutive month, with the index remaining in negative territory at -2.1 in July.
Retail sector labor market indicators suggested no growth in employment and hours worked. Both the employment index and the hours worked index improved slightly to -0.8 and 0.6 respectively, with the near-zero readings reflecting flat headcounts and no change in hours worked from last month. Meanwhile, the part-time employment index increased to 2.0 from -4.9.
Perceptions of broader business conditions were less pessimistic in July. Both the general business activity index and the company outlook index remained in negative territory, but improved to -4.0 and -3.3, respectively. The outlook uncertainty index fell three points to 16.3 but remained above its series average.
Input price and wage growth accelerated while selling price pressures eased this month. The input prices index rose 14 points to 31.6, while the selling prices index dipped five points to 9.0. The wages and benefits index increased 18 points to 14.4.
Expectations for future retail activity improved in July. The future general business activity index jumped to 15.6 from -3.2 while the future sales index rose 12 points to 31.2. Other future retail activity indexes, such as employment and capital expenditures remained in positive territory.
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: August 26, 2025
Data were collected July 15–23, and 255 of the 359 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.
Data have been seasonally adjusted as necessary.