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Dallas Fed's factory index rebounds into positive mode for 1st time in 4 months

Overall business activity in the Texas manufacturing sector rebounded in August following three consecutive months of remaining in the contraction territory, as production index reached a nearly 12-month high and the shipments index as well as the capacity utilization index registered 11-month highs, according to the latest survey data from the Federal Reserve Bank of Dallas.

The Dallas Fed's seasonally adjusted general business activity index rose to positive 2.7 in August, compared with negative 6.3 recorded in the prior month. The latest reading surpassed the consensus estimate of a negative 3.0 index reading from economists polled by Econoday.

A reading below zero indicates a monthly decrease.

The production index went up to 17.9 in August from the prior month's 9.3, while the index for new orders rose to 9.3 from 5.5 recorded in July.

The shipments index rose to 17.6 from 10.2, while that for capacity utilization advanced to 15.7 from July's 11.2.

Labor market measures indicated slower growth in employment and work hours in August, with the employment index dropping to 5.5 from 16.0 registered in the prior month and the hours worked index falling to 4.0 from 6.6.

Manufacturing firms' perceptions of broader business conditions improved in August, with the company outlook index rebounding to positive 5.0 from negative 0.9.

Looking at the next six months, the index of company outlook registered an increase compared with the prior month's forecast. However, the index of future general business activity dropped as other indicators of future manufacturing activity also registered declines, including production and new orders.