NY Services Activity Contraction Eases in April

The New York Fed’s Services Business Activity Index climbed 8.2 points to -5.8 in May 2026, marking its highest reading since January 2025. While activity in the region’s service sector continued to contract, the decline eased significantly, according to respondents to the Federal Reserve Bank of New York’s Business Leaders Survey. The business climate index also improved modestly but remained deeply negative at -46.9, indicating that firms still viewed conditions as substantially worse than normal. Employment edged slightly higher during the month, while wage growth slowed noticeably. At the same time, supply availability continued to deteriorate. Inflationary pressures remained persistent, with firms reporting steep increases in input costs and still-elevated selling prices. Looking ahead, businesses expressed somewhat greater optimism about conditions over the next six months.

The Federal Reserve Bank of New York's general business activity index, which tracks economic activity in New York State as well as parts of New Jersey and Connecticut, rose nine points to -14 in April 2026. Twenty-four percent of respondents reported that conditions improved over the month while 38 percent said that conditions worsened. The business climate index ticked down three points to -49.3, suggesting the business climate remained much worse than normal. Employment edged slightly lower and supply availability worsened significantly. The pace of input price increases accelerated sharply, while selling price increases picked up modestly. Looking ahead, firms expect little improvement in the next six months.

The Federal Reserve Bank of New York's general business activity index, which tracks economic activity in New York State as well as parts of New Jersey and Connecticut, inched up to -22.6 in March of 2026 from the five-year low of -25.7 in the previous month. Despite the slight improvement in the rate of deterioration, the reading still reflected one of the sharpest declines in activity since the US economy started to recover from the Covid shock 5 years prior. The business climate index dropped by 4.5 points from the earlier month to -46.2 and the prices charged dropped by 1.1 points 28.8. In turn, the index measuring employment improved by 1.2 points to -8.5. Looking ahead, the business activity expectations index dropped by 4.8 points to 12.7.