Overview
- The Dallas Fed's Texas Manufacturing Outlook Survey showed the general business activity index rose to 0.4 from −2.3, a move that indicates little net change and shifts the sector out of slight contraction.
- Production growth slowed sharply as the production index fell to 9.4 and measures of capacity utilization, new orders, and shipments all weakened, pointing to softer demand for goods.
- Input prices climbed to an eight‑month high with the raw materials index at 42.7 while the finished goods prices index eased to 18.9, creating a widening gap that squeezes factory margins.
- Labor conditions were stable on payrolls with the employment index at 0.2, but hours worked fell to 1.8 which suggests firms are trimming work intensity rather than cutting staff.
- The survey, collected May 12–20 with 75 responses and released May 26, shows firms expect stronger production six months ahead but elevated uncertainty at 19.2 could restrain hiring and capital spending.