The Federal Reserve Bank of Dallas reported on Wednesday that its general
business activity index for the service sector in Texas rose to -10.1 in May from
an unrevised -19.47 in the previous month. This marked the 3rd consecutive
negative reading but the highest one in the sequence.
According to the survey’s details, the revenue index, a key measure of
service sector conditions, fell by 8.5 points to -4.7, suggesting a slight
contraction in activity. The employment indicator increased by 4.9 points to -0.2,
pointing to a little change in
employment after a marginal decline in April. The
hours worked measure dropped by 2.8 points to -1.2, suggesting workweeks were
unchanged in May. Meanwhile, the company outlook index surged by 7.2 points to -8.3,
indicating a worsening in perceptions of broader business conditions in May.
On the price front, the input prices index plunged by 12.0 points to +20.5,
its lowest level since November 2024 (18.8), while the selling prices index decreased
by 3.2 points to +5.2, indicating a slowdown in input and selling price growth. Meanwhile,
wages and benefits index went up 0.6 point to 9.7, suggesting that wage growth remained
stable in May.