US Dallas Fed Manufacturing Activity Rebounds in May

The Dallas FED's general business activity index for Texas manufacturing increased to 0.4 in May 2026, rebounding from -2.3 in April. Perceptions of broader business conditions were stable, with the company outlook index at 0.3, down from 3, suggesting firms’ outlooks were essentially unchanged, while the outlook uncertainty index increased slightly to 19.2, but remaining above the series average of 16.9. Labour market conditions were broadly flat, the employment index was unchanged at 0.2 and the hours worked index fell to 1.8 from 4. Wage pressures held steady and the wages and benefits index was relatively unchanged at 18.9. Price pressures for inputs increased, the raw materials price index rose to 42.7, the highest level in 8 months, while the finished goods index fell to 18.9. Looking ahead, future general business activity index came at 14.3, with firms expecting increases in manufacturing activity.

The Dallas FED's general business activity index for Texas manufacturing fell to -2.3 in April 2026 from -0.2 in March, marking its lowest level so far this year. The company outlook index rebounded into positive territory at 3, while the outlook uncertainty index declined to 17.9 after nearing a one-year high in March. Labor market indicators were largely stable. Employment remained flat, but firms reported slightly longer workweeks, with the hours worked index rising to 4 from 0.9. Wage pressures showed little movement, as both the wages and benefits index were unchanged. Price pressures intensified, the finished goods price index surged to 27.6, its highest level since July 2022, while the raw materials price index climbed 4.3 points to 37. Looking ahead, expectations of general business activity rose 4 points to 14.1, as firms expect an increase in manufacturing activity over the next six months.

The Dallas Fed's general business activity index for Texas manufacturing fell to -0.2 in March 2026 from 0.2 in February, indicating no change in activity. However, the company outlook index dropped nearly seven points to -3.5, moving into negative territory. The outlook uncertainty index surged 20 points to 26.0, its highest reading since April 2025. Employment growth stalled and workweeks were flat in March. The employment index came in near zero, with 15 percent of firms reporting net hiring and 16 percent reporting net layoffs. The hours worked index fell to 0.9 from 6.1. Price pressures were little changed while wage growth slowed. The finished goods prices index and raw materials prices index held relatively steady at 18.4 and 32.7. The wages and benefits index fell to 25.2 from 31.9. Looking ahead, manufacturers expect increased activity in six months. The future production index held steady at 35.7 and the future general business activity index fell two points to 10.6.