NY Services Activity Drops the Most in 7 Months

The New York Fed’s Services Business Activity Index fell to -20.7 in October 2026 from -8.7 in September, marking its lowest level since March as business activity contracted at a faster pace. The business climate index was little changed at -35.0, with just over half of respondents describing conditions as worse than normal. Employment was steady, while wage growth remained modest. Supply availability continued to deteriorate, although at a slower pace than in September. Input price increases remained sharp, while selling price increases accelerated to their fastest pace since 2022. Capital spending remained weak. Looking ahead, firms turned pessimistic about the six-month outlook, with the expectations index falling into negative territory for the first time since December 2025. Expectations for future input and selling price increases remained elevated and largely unchanged.

The New York Fed’s Services Business Activity Index dropped to -8.7 in September 2026 from 0.5 in August, reversing the upbeat sentiment recorded over the previous two months. The business climate index fell ten points to -35.9, as nearly half of respondents reported an unfavorable climate, indicating that business conditions were notably worse than normal as supply availability continued to deteriorate. Employment edged lower by seven points to -4.9, while wage growth remained close to levels seen in recent months. Input price growth continued to increase significantly, while selling-price pressures also picked up. Capital spending remained weak. Looking ahead, firms expect modest growth in business activity over the next six months, with employment expected to increase. Price pressures are also expected to remain elevated as supply availability continues to deteriorate.

The New York Fed’s Services Business Activity Index dropped to 0.5 in August 2026 from 8.7 in July, which was the highest reading since May 2022. The business climate index remained deeply negative at -25.7, with 43% of respondents reporting unfavorable business conditions. At the same time, the supply availability index fell five points to -14.3, indicating a sharper deterioration in supply conditions than in the previous month Meanwhile, employment saw a slight improvement, while wages continued to rise at a modest pace. The prices paid index rose three points to 70.1, pointing to a modest acceleration in input price growth, while the prices received index was unchanged at 27.7. The future business climate index declined 17 points to -16.5, pointing to increased pessimism about the outlook. Employment is expected to rise modestly, while firms continue to anticipate elevated price pressures and some further deterioration in supply availability. Capital spending plans remained subdued.