December Texas Services Sector Activity Falls Less Than Projected, Dallas Fed Data Show

12:10 PM EST, 12/30/2025 (MT Newswires) -- Activity in Texas' services sector continued to contract in December, though less than expected, amid near-zero readings for employment and part-time employment, the Federal Reserve Bank of Dallas said Tuesday.

The general business activity index fell to a reading of minus 3.3 this month from minus 2.3 in November, compared with expectations for a minus 4.6 print in a survey compiled by Bloomberg.

The revenue index, which the regional Fed said is a key measure of state service sector conditions, improved to 0.1 from minus 2.5 last month. The employment index slipped into negative territory with a reading of minus 0.8, compared with 3.1 in November. The part-time employment measure swung to minus 0.8 from 0.2.

"Labor market measures suggested little change in employment while prices and wages increased at about the same pace as in November," said Isabel Brizuela, Dallas Fed business economist. "Perceptions of broader business conditions continued to worsen slightly though expectations regarding future service sector activity remained positive."

The input prices index edged down to 26.2 from November's 27.6, while selling prices moved to 7.9 from 6.5. The wages and benefits gauge dropped to 10.8 from 14.7. Looking ahead by six months, general business activity for the services sector ticked down to 12 from November's reading of 13.

According to a retail survey that is part of the broader poll, the sales index dropped 14 points to minus 20.6 this month.

"Retail sales fell sharply in December, and labor market indicators suggested a decline in employment," Brizuela said. "Perceptions of broader business conditions worsened, and uncertainty in outlooks increased. Input and selling prices climbed."

Texas is the second-biggest US state by gross domestic product after California. Data on Monday showed its manufacturing sector downturn worsened this month as the production, shipments, new orders, and employment measures turned negative.

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