Texas factory sector stalled at neutral in June

The Dallas Federal Reserve's manufacturing index landed at exactly zero in June, down 0.4 points from May's 0.4 reading. Zero is the line between expansion and contraction on the survey's diffusion scale. Positive territory means more respondents reported growth than decline. Negative means the opposite. At zero, the factory managers on balance saw no change in June from the prior month.

May's print had been the first positive reading since March, when the index stood at -1.3. April came in at -3.4. The slow crawl back toward zero over three months paints a picture of an industrial sector that is not falling apart but also not gaining traction.

Texas is the country's biggest manufacturing state by output, with heavy concentrations in petrochemicals, electronics, and machinery. Its factory activity often acts as a bellwether for the broader U.S. manufacturing sector. The June result fits a pattern visible across the regional Fed surveys. The Philadelphia Fed's index turned negative in June after a brief positive blip. The New York Fed's Empire State index stayed deep in contraction. The Kansas City Fed's May reading was negative as well. Taken together, the regional surveys describe a factory sector that is flat at best.