Dallas Fed: Growth in Texas service sector activity continues

DALLAS—Texas service sector activity expanded at a faster pace in December than the prior month, according to business executives responding to the Texas Service Sector Outlook Survey. 

“Labor market measures suggested a slight slowing in employment growth and little change in workweeks,” said Jesus Cañas, Dallas Fed senior business economist. “Price pressures increased but wage pressures held steady. Perceptions of broader business conditions improved in December.”

Key takeaways from the service sector survey: 

• The revenue index increased three points to 13.8. 
• The employment index fell three points to 2.4.
• Both the selling prices index and the input prices index increased five points to 8.0 and 23.8, respectively.
• The wages and benefits index was little changed at 15.8.  
• The general business activity index was practically unchanged at 9.6.
• The company outlook index edged up to 11.7.    

Texas retail sales growth strengthens in December 

“Retail sales activity accelerated in December, but retail labor market indicators suggested flat employment and slightly shorter workweeks,” Cañas said. “Perceptions of broader business conditions improved, but optimism waned sightly.”

Key takeaways from the retail survey: 

• The sales index increased 13 points to 17.3, its highest level since late 2021.
• The employment index fell five points to 0.5.
• The general business activity index fell five points to 3.6.

From Dec. 16–24, the Dallas Fed asked a series of special questions on wages, prices, outlook concerns, employment, and tariffs in the Texas Business Outlook Surveys. 

The Dallas Fed conducts the survey monthly to obtain a timely assessment of activity in the state’s service sector, which represents almost 70 percent of the state’s economy and employs about 9.5 million workers.

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Media contact:
Jon Prior
Federal Reserve Bank of Dallas
Phone: 214-922-6857
Email: jon.prior@dal.frb.org