The Texas Service Sector Revenue Index rose 10.4 pts to 6.3 in July, signaling a return to expansion after two months of contraction.

• Employment improved to 2.8 (from -1.2), while hours worked rose to 3.2; part-time employment weakened further to -3.8.
• Input prices climbed to 25.3 (from 21.3) and wages/benefits increased to 13.4 (from 8.6), indicating stronger cost pressures.
• Selling prices fell -3.5 pts to 3.3, suggesting slower price pass-through to customers.
• Capital expenditures rose 4.6 pts to 12.1, above the series average.
• General Business Activity rebounded to 2.0 (from -4.4), while the Company Outlook remained negative at -2.1; Outlook Uncertainty declined sharply to 12.8 (from 19.7).

The Texas Retail Sales Index rebounded sharply to 0.8 in July (from -29.5 in June), indicating flat sales after two months of steep declines.

• Employment improved to -0.8 (from -9.0), and hours worked rose to 0.6 (from -14.1), suggesting stable labor conditions.

• Input prices surged to 31.6 (from 17.5), and wages and benefits jumped to 14.4 (from -3.3), while selling price pressures eased to 9.0 (from 14.1).
• Inventories remained negative at -2.1, the sixth straight monthly decline.
• Companywide retail activity remained weak with sales at -15.3 and internet sales at -9.0, though both improved from June.
• General Business Activity and Company Outlook rose over 20 pts each to -4.0 and -3.3, respectively, while Outlook Uncertainty fell to 16.3 but stayed above average.