US Dallas Fed Manufacturing Index Inches Up in February

The Dallas Fed’s general business activity index for Texas manufacturing rose to 0.2 in February 2026 from -1.2 in the prior month, signaling near-stable conditions. Company outlook held steady at 3.1, while uncertainty rose to 6.5 but stayed below average. Employment growth continued, with the index unchanged at 7.5, workweeks lengthened as hours worked jumped to 6.1 from 0.7. Pricing pressures were mixed: finished goods prices held at 17.9, while raw materials costs eased to 31.7 from 36.7. Wage growth surged, the wages and benefits index climbed to 31.9 from 17.4. Looking ahead, manufacturers are optimistic: future production rose five points to 34.3, and future business activity dipped to 12.7.

The Dallas Fed’s general business activity index for Texas manufacturing increased 10 points to -1.2 in January 2026, reversing December’s contraction, while the outlook index rebounded into positive territory at 2.9, indicating an improvement in perceptions of broader business conditions. Manufacturing activity strengthened across the board. The production index jumped to 11.2, signaling a solid expansion in output. New orders rose 18 points to 11.8, capacity utilization moved up 12 points to 7.1, and the shipments index increased to 12.0. Labor market indicators pointed to resumed hiring and steady workweeks. The employment index increased to 8.2, with firms reporting net hiring. The hours worked index moved up to 0.7, indicating no change in hours worked. Selling price pressures increased, input price pressures were little changed and wage growth slowed slightly.

The Dallas Fed’s general business activity index for Texas manufacturing fell 0.5 points to -10.9 in December 2025, its lowest level since June, while the outlook index sank deeper into negative territory at -11.9, indicating a deterioration in perceptions of broader business conditions. Manufacturing activity weakened across the board. The production index dropped 24 points to -3.2, signaling a modest decline in output. New orders fell 11 points to -6.4, capacity utilization plunged 24 points to -4.5, and the shipments index slid to -10.6, its lowest reading in 17 months. Labor market indicators pointed to largely unchanged headcounts but shorter workweeks. The employment index edged down to -1.1, with 12% of firms reporting net hiring and 13% reporting net layoffs. The hours worked index fell sharply by 17 points to -7.5. Price pressures were little changed, while wage growth showed a slight pickup.