US Fifth District Services Index Flat in September

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.

The Richmond Fed Fifth District Service Sector Survey was broadly unchanged in July 2026, marking a second consecutive month of flat activity. The revenues index slipped to -3 from 0, while the demand index edged up to 5 from 4. Current local business conditions improved slightly to -5 from -7, although expectations weakened, with the future business conditions index falling to 9 from 16. Employment growth moderated, as the current employment index declined to 4 from 8, while the forward-looking employment gauge was little changed at 23, pointing to continued hiring plans. Wage growth remained firm, with both current and expected wage indexes staying in positive territory. Price pressures eased slightly, as the growth rate of prices paid slowed, while prices received rose marginally. Firms expect both measures to moderate further over the next 12 months.