October 28, 2025
Texas service sector activity weakens further
Texas service sector activity contracted further in October, according to business executives responding to the Texas Service Sector Outlook Survey. The revenue index, a key measure of state service sector conditions, fell four points to -6.4, its lowest reading since July 2020.
Labor market measures suggested further declines in employment, though hours worked were largely unchanged this month. The employment index fell slightly to -5.8 from -3.6 in September. Both the part-time employment index and the hours worked index held steady, registering -0.1 and -1.4 respectively. These near-zero readings suggest little change in part-time employment or the length of workweeks in October.
Perceptions of broader business conditions worsened in October while uncertainty increased at about the same pace as in September. The general business activity index pushed further negative, falling four points to -9.4. The company outlook index also dropped to -10 from -2.6 in September. The outlook uncertainty index was little changed at 22.2, though it remains well above the series average of 13.8.
Input price and wage pressures held steady while selling prices edged up. The input prices index came in at a reading of 23.0, similar to September. The wages and benefits index was also little changed at 10.7. Meanwhile, the selling prices index ticked up three points to 4.6.
Respondents’ expectations regarding future service sector activity remained positive, though October readings were below average. The future revenue index was little changed at 33.7 while the future general business activity index dipped six points to 5.7. Other future service sector activity indexes, such as employment and capital expenditures, remained in positive territory but moved down from their September readings.
October 28, 2025
Texas retail sales contract further
Retail sales fell further in October, according to business executives responding to the Texas Retail Outlook Survey. The sales index, a key measure of state retail activity, fell to -23.5 from -17.2 in September. Retailers’ inventories remained unchanged, with an index reading of zero signaling little change in inventories in October.
Labor market indicators reflected a further contraction in retail employment and hours worked. The employment index plunged to -15.3 from -3.0, while the part-time employment index was little changed at -3.2. The hours worked index also held steady with a reading of -6.8, suggesting a similar contraction in hours worked as last month.
Perceptions of broader business conditions deteriorated further in October and uncertainty in outlooks increased, though at a slower pace than in September. The general business activity index fell nine points to -23.7, while the company outlook index fell 17 points to -22.3. The outlook uncertainty index fell nine points to 17.3 but remained above its series average.
Input and selling price pressures increased while wage pressures held steady this month. The selling prices index moved up six points to 15.4, while the input prices index rose nine points to 30.6, surpassing the series average of 22.6. The wages and benefits index was little changed at 13.3.
Expectations for future retail activity remained positive in October. The future sales index fell three points to 23.2, remaining in solidly positive territory. Meanwhile, the future general business activity index came in at 3.2, similar to September. Other future retail activity indexes, such as employment and capital expenditures also remained in positive territory, though the future employment index was down notably from its September reading.
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: November 25, 2025
Data were collected Oct. 14–22, and 242 of the 350 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.