US Fifth District Services Stay Resilient

The Richmond Fed’s Fifth District Service Sector Survey edged up in October 2026, with the revenues index rising to 2 from zero in September and the demand index increasing to 7 from 2. Expectations remained positive, with future revenues and demand indexes firmly in expansionary territory. The local business conditions index improved to -5 from -8, while the future local business conditions index was unchanged. The current employment index rose slightly to 3 from 2, while the future employment index fell to 11 from 19. Both current and future wage indexes remained positive. The average growth rate of prices paid increased, while the growth rate of prices received was unchanged. Over the next 12 months, firms expect price growth for inputs to slow, while price growth for their own products is expected to remain relatively steady.

The Richmond Fed Fifth District Service Sector Survey was flat in September 2026, with the revenues index rising to 0 from -8, while the demand index inched down to 2 from 3. Current business conditions improved, with the local business conditions index rising to -8 in September from -12 in August, while the future conditions index fell to 0 from 9. The current employment index fell to 2 in September from 8 in August, while the forward-looking employment index edged lower but remained positive. On prices, the average growth rate of prices paid decreased somewhat in September, while prices received increased a bit. Over the next 12 months, firms expected growth in prices paid to remain broadly stable, while anticipating a slight moderation in prices received. Looking ahead, firms remained relatively optimistic, as expectations for future revenues, demand and local conditions stayed firmly positive.

Activity in the US Fifth District’s service sector weakened somewhat in August, with the revenues index declining to -8 from -3 in July, while the demand measure eased to 3 from 5. Local business conditions also deteriorated (-12 from -5). The current employment index rose to 8 from 4, while expectations for future hiring remained strong. Wage growth also continued, according to both current and forward-looking measures. Meanwhile, price pressures showed some renewed momentum. The pace of increase in prices paid by firms accelerated slightly, while prices received also continued to rise. Businesses nevertheless expect input price growth to moderate over the coming year, although they anticipate little change in the pace of price increases charged to customers. Looking ahead, firms remained relatively optimistic, as expectations for future revenues, demand and local conditions stayed firmly positive.