August 26, 2025
Growth in Texas service sector activity continues
Texas service sector activity expanded at a slightly faster pace in August, according to business executives responding to the Texas Service Sector Outlook Survey. The revenue index, a key measure of state service sector conditions, increased to 8.6 in August from 6.3 last month.
Labor market measures indicated flat employment and a modest increase in hours worked in August. The employment index edged down to 1.2 from 2.8 in July. The near-zero reading signals little change in employment over the period. The part-time employment index edged up to -2.7 from -3.8, while the hours worked index increased two points to 5.1.
Perceptions of broader business conditions improved in August. The general business activity index increased five points to 6.8, and the company outlook index rose six points to 4.3, its first positive reading in six months. The outlook uncertainty index fell two points to 11.2.
Input price and wage pressures increased slightly , while selling price growth was stable. The input prices index increased to 27.9 from 25.3, and the wages and benefits index rose two points to 15.7. The selling prices index was relatively unchanged at 2.7.
Respondents’ expectations regarding future business activity improved. The future general business activity index was relatively unchanged at 10.7, while the future revenue index increased three points to 33.8. Other future service sector activity indexes such as employment and capital expenditures, remained in positive territory, reflecting expectations for continued growth in the next six months.
August 26, 2025
Texas retail sales dip again
Retail sales declined in August, according to business executives responding to the Texas Retail Outlook Survey. The sales index, a key measure of state retail activity, fell three points to -2.1. Retailers’ inventories fell for the seventh consecutive month, with the index remaining in negative territory at -2.7 in August.
Labor market indicators reflected a contraction in retail employment and hours worked. The employment index dipped to -2.0 from -0.8, while the part-time employment index dropped 18 points to -15.5. The hours worked index retreated four points to -3.6.
Perceptions of broader business conditions improved in August while company outlooks stabilized. The general business activity index moved back into positive territory to 1.9 from -4.0, while the company outlook index moved up four points to 0.7 in August, with the near-zero reading indicating little change in company outlooks from July. The outlook uncertainty index fell eight points to a below-average reading of 8.2.
Input prices, selling prices and wage pressures eased this month. The input prices index fell nine points to 22.4, while the selling prices index dipped five points to 4.1. The wages and benefits index fell three points to 11.5.
Expectations for future retail activity improved in August. The future general business activity index ticked down two points but remained in positive territory at 13.4, while the future sales index moved sideways to 29.6. 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: September 30, 2025
Data were collected August 12–20, and 252 of the 355 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.