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.