Dallas Fed Business Activity Returns to Contraction

The Dallas Fed's general business activity index dropped 12 points from the prior month to -5.6 in September 2025, hitting its lowest level since May and indicating renewed contraction. The revenue index, a key measure of state service sector conditions, fell 11 points to -2.4. At the same time, the employment index edged down to -3.6 from 1.2 in August. Additionally, outlooks worsened, with the company outlook index down seven points to -2.6 and the outlook uncertainty index rising 11 points to 22.5. Meanwhile, the gauge for capital expenditures rose to 7.3 from 5.8, and price pressures eased slightly. The input prices index fell to 24.4 from 27.9, and the wages and benefits index edged down four points to 11.9. The selling prices index was relatively unchanged at 1.6. Lastly, the future general business activity index and the future revenue index were relatively unchanged at 11.6 and 35.3, respectively.