The New York Fed’s Services Business Activity Index slipped to 0.5 in August 2026 from 8.7 in July, when it had reached its highest level since May 2022. The business climate index stayed deeply negative at -25.7, with 43% of respondents reporting unfavorable conditions. At the same time, the supply availability index fell five points to -14.3, signaling a sharper deterioration in supply conditions than in the previous month.
Employment showed a slight improvement, and wages continued to rise at a modest pace. The prices paid index increased three points to 70.1, indicating a modest pickup in input cost inflation, while the prices received index was unchanged at 27.7.
The future business climate index dropped 17 points to -16.5, reflecting growing pessimism about the outlook. Firms expect employment to rise modestly, but they also anticipate persistently elevated price pressures and further weakening in supply availability. Capital spending plans remained subdued.
