Texas economy

Texas service sector activity remained in contractionary territory in June, according to business executives responding to the Texas Service Sector Outlook Survey.

Texas factory activity was largely unchanged in June, according to business executives responding to the Texas Manufacturing Outlook Survey.

The Texas economy grew in May. Employment growth was robust, as was labor force growth. The May Texas Business Outlook Surveys showed a moderation in wages and benefits growth.

Retail gasoline and diesel prices continue to decline. Motor gasoline consumption remains in line with historic trends, and distillate fuel consumption dipped significantly in the first half of 2025. Natural gas liquids production continues to grow, as do exports.

Bankers responding to the second-quarter agriculture survey reported mildly improved conditions across most regions of the Eleventh District.

The Texas Employment Forecast indicates jobs will increase 2.0 percent in 2025, with an 80 percent confidence band of 1.5 to 2.5 percent.

Texas solar power generation grew faster compared to other fuel types in 2024, although natural gas and wind generation continue to make up the highest shares of Texas’ electricity grid.

Banks in the Federal Reserve Eleventh District have adapted to rising interest rates, which have discouraged new borrowing and complicated the transition to higher-earning loan portfolios, while credit remains strong as borrowers continue to make payments amidst economic growth.