TL;DR
The New York Fed’s October Business Leaders Survey found that service firms’ outlook for the next six months turned negative for the first time since December 2025. Current business activity weakened, employment was flat, and input prices continued to rise sharply; the survey also recorded its highest prices-received reading in four years.
The New York Fed’s October survey found that service-sector firms in New York State and nearby areas turned pessimistic about the six-month business outlook, the first negative reading since December 2025. The future business activity index fell 10 points to –5.1, while current activity weakened and measures of business prices remained elevated.
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The survey’s headline business activity index dropped 12 points to –20.7, its lowest reading since March, indicating that firms reported a decline in current activity. The separate future activity index’s move below zero means respondents, on balance, expected a small decline in business activity over the coming six months, according to the New York Fed’s report. These are survey indexes, not direct measures of the region’s economic output.
Cost and pricing measures remained a prominent part of the results. The prices paid index stayed near 70, a level the report associated with continued sharp increases in input prices. The prices received index rose three points to 36.3, its highest level in four years, indicating that reported increases in firms’ selling prices were widespread. The report did not quantify how much businesses’ costs or prices changed in dollar or percentage terms.
The employment index rose five points to zero, which the New York Fed said signaled that employment held steady. Richard Deitz, an economic research adviser at the bank, said current activity declined significantly, employment was flat and price increases remained widespread. He also described firms as somewhat pessimistic about the outlook. The survey was released Friday, October 16, and reflects responses gathered from October 2 through October 9.
Costs and Weak Activity Weigh on Firms
The results offer a timely snapshot of how service businesses in the New York Fed district view conditions, including demand, staffing and pricing. A negative future index means respondents expecting weaker activity outweighed those expecting improvement, though the reading points to a small expected decline, not a forecast of a severe contraction. The survey alone cannot establish whether the region’s economy will shrink.
The combination of weaker current activity and continued cost increases may complicate decisions about hiring, investment and customer pricing. Firms reporting higher input costs may try to pass some of them on, and the rise in the prices received index suggests selling-price increases were being reported more broadly. However, the survey does not show how much of those costs were passed through, how consumers responded or whether firms’ profit margins changed.
The flat employment reading provides a counterpoint to the weak activity measures: respondents did not report a net change in employment in the index. Taken together, the figures describe softening business activity alongside persistent price pressure, rather than a clear picture of either expanding employment or falling staffing levels.
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Survey Covers the New York Fed District
The New York Fed conducts its Business Leaders Survey monthly, asking executives at service-sector firms in its district about business indicators. The district includes New York State, Northern New Jersey and Fairfield County, Connecticut. The survey excludes manufacturing firms and includes businesses from a range of other industries.
The October report was based on responses collected during a nine-day period, October 2–9. It should be read as a survey of participating executives’ reported conditions and expectations, rather than a complete count of all firms or a final measure of economic activity. The shift in the future index was a change in sentiment from the prior month; the report identified December 2025 as the last time the index had been negative.
Other recent business-confidence surveys also pointed to concerns among executives and small businesses, though they cover different populations and periods. The National Federation of Independent Business said its small-business optimism index dipped in September to its lowest reading since June and just below its 52-year average, citing respondents’ concerns about labor quality or availability. The Conference Board reported that CEO confidence declined in the fourth quarter, with views of current and expected conditions turning moderately negative. Those surveys provide broader context but are not directly comparable with the New York Fed’s district-level service-sector index.
“Business activity in the New York-Northern New Jersey region’s service sector declined significantly in October. Employment was flat, and price increases remained widespread. Firms turned somewhat pessimistic about the outlook.”
— Richard Deitz, economic research adviser at the Federal Reserve Bank of New York
Limits of the Survey Findings
The survey does not establish why the outlook turned negative or how much particular cost categories contributed. It also does not provide, in the supplied report, respondent-level results, a breakdown by industry or firm size, or estimates of the dollar impact of rising input costs. The indexes summarize responses and should not be treated as measured changes in regional output, prices or employment.
It remains unclear whether the October weakness will persist, whether firms will change staffing or prices in response, and whether the negative expectations will translate into lower activity over the next six months. The results reflect responses collected between October 2 and 9, not conditions throughout the entire month. Comparisons with national confidence surveys also require caution because those polls differ in their respondents, timing and methodology.
Watch the November Survey
The New York Fed’s next monthly Business Leaders Survey should show whether service firms’ outlook remains below zero and whether reported activity, employment and price indexes change. The October report does not specify a release date for the next results. Subsequent readings will help show whether this month’s decline was sustained or reversed, but the indexes will remain one input among other economic data.
Readers can also compare later survey results with measures of actual business activity and employment, as well as with updates from the NFIB and Conference Board. For now, the confirmed finding is narrower: in the responses collected October 2–9, New York-area service firms reported weaker current activity, flat employment and a negative six-month outlook while price pressures remained widespread.
Key Questions
What did the New York Fed survey find?
The October survey found that the future business activity index for service firms fell 10 points to –5.1, its first negative reading since December 2025. The headline index for current activity declined to –20.7.
What does a negative future activity index mean?
According to the New York Fed, a negative reading means firms expected a small decline in activity over the next six months, on balance. It is a survey measure of expectations, not a confirmed forecast of economic output.
What did the survey say about costs and prices?
The prices paid index remained near 70, which the report linked to sharp increases in input prices. The prices received index rose three points to 36.3, its highest reading in four years. The report did not give a dollar or percentage estimate of the price changes.
Did employment decline?
No net change was indicated by the survey’s employment index: it rose five points to zero, which the New York Fed said meant employment held steady.
When were responses collected?
The October survey was released on October 16, 2026, and its responses were collected from October 2 through October 9.
Source: rss
