The Federal Reserve Bank of Dallas reported that its general business activity index for the service sector rose slightly in May 2026, gaining 2.2 points from the previous month to reach -7.7. Revenues also edged higher, increasing to 5 from 4.3 in April, marking a fifth consecutive month of growth. However, overall business conditions continued to worsen, pressured by persistently elevated input costs (29.7 versus 31.2 previously), as the war in the Middle East drove up energy expenses for service providers nationwide. As a result, employment contracted at a faster rate, with the corresponding index falling to -3.2 from -1.