September 30, 2025
Texas service sector activity falters amid increased uncertainty
Texas service sector activity contracted slightly in September, according to business executives responding to the Texas Service Sector Outlook Survey. The revenue index, a key measure of state service sector conditions, fell 11 points to -2.4.
Labor market measures suggested employment declines and little change in hours worked this month. The employment index edged down to -3.6 from 1.2 in August. The part-time employment index improved to -0.6 from -2.7, while the hours worked index fell six points to -1.0, with the near-zero reading signaling little change in the length of workweeks over the period.
Perceptions of broader business conditions worsened in September, and uncertainty rose. The general business activity index dropped 12 points to -5.6, and the company outlook index fell seven points to -2.6. The outlook uncertainty index increased 11 points to 22.5.
Input price and wage pressures eased slightly, while selling prices were stable. The input prices index fell to 24.4 from 27.9, and the wages and benefits index edged down four points to 11.9. The selling prices index was relatively unchanged at 1.6.
Respondents’ expectations regarding future business activity improved. The future general business activity index and the future revenue index were relatively unchanged at 11.6 and 35.3, respectively. Other future service sector activity indexes, such as employment and capital expenditures, remained in positive territory and increased, reflecting expectations for continued growth in the next six months.
September 30, 2025
Texas retail sales fall further
Retail sales declined in September, according to business executives responding to the Texas Retail Outlook Survey. The sales index, a key measure of state retail activity, dropped 15 points to -17.2.  Retailers’ inventories remained unchanged, with an index reading of -0.3 signaling little change in inventories in September.
Labor market indicators reflected a contraction in retail employment and hours worked. The employment index dipped to -3.0 from -2.0, while the part-time employment index increased to -3.9 from -15.5. The hours worked index retreated five points to -8.2.
Perceptions of broader business conditions worsened in September. The general business activity index dropped 17 points to -14.7, while the company outlook index fell six points to -5.4. The outlook uncertainty index increased 18 points to 26.6.
Input prices and wage pressures held steady while selling price pressures increased slightly this month. The input prices index was unchanged at 22.0, while the selling prices index edged up five points to 9.2. The wages and benefits index remained stable at 12.6.
Expectations for future retail activity were less bullish in September. The future general business activity index fell nine points but remained in positive territory at 4.7, while the future sales index fell three points to 26.6. 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: October 28, 2025
Data were collected Sept. 16–24, and 263 of the 357 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.