The New York Fed’s Services Business Activity Index fell to -8.7 in September 2026 from 0.5 in August, erasing the modest gains seen over the previous two months. The business climate index declined ten points to -35.9, with nearly half of respondents describing conditions as unfavorable, signaling that business conditions were significantly worse than normal amid ongoing deterioration in supply availability.
Employment slipped further, with the index down seven points to -4.9, while wage growth held roughly in line with recent months. Input prices continued to rise sharply, and selling-price pressures also strengthened. Capital spending remained subdued.
Looking ahead, firms anticipate only modest growth in business activity over the next six months, but they do expect employment to increase. Price pressures are projected to stay elevated as supply availability continues to worsen.