The Dallas Fed manufacturing index came in at -4.9 for November, better than expected.
Economists had forecast that, remaining negative for an eleventh straight month, the index climbed to -10, from -12.7 prior.
Business executives said factory activity improved for a second straight month, as the production index rose to 5.2 from 4.8.
But the big, double-digit increase was in the employment index, which jumped to 11.6, the highest level since August 2014.
The new orders index rose by six points to 1.6, and the price indexes stayed negative, as they have been for most of the year.
One survey respondent in machinery manufacturing was able to weather the oil-industry slowdown and increase sales by simply steering clear of it. Another business said that although bookings from the off-shore oil industry were strong in the past three months, it was prepping for layoffs next year amid all the uncertainty.