Dallas Fed's General Activity Index Jumps

Regional indications point to a very strong month of May including the Dallas Fed's general activity index which jumped 5 points to 26.8 to beat Econoday's consensus by 3.6 points. Production, up 10 points to 35.2, is at a 12-year high as is capacity utilization which surged 13.5 points to 32.2. And strength in orders points to greater utilization ahead with the growth rate of new orders up 8 points to 26.5 for yet another 12-year high. Employment is up 6 points to 23.4 which is a 6-year high.

With all this strength it's no surprise that price and wage pressures remain "highly elevated" as the report says, underscored by a rise for finished prices where a quarter of the sample, which numbers roughly 100 in any one month, reporting gains in the month.

How long can these rates of growth go on before business expansion -- because of lack of capacity especially for employment -- begins to slow is the question especially for this sample.