NY Fed service sector survey finds notable price pressures
TLT•New York Fed survey respondents said selling prices rose at their fastest pace since 2022 and supply availability worsened. The business activity index fell 12 points to -20.7, its weakest reading since March.
1. Prices and activity
Service sector business leaders reported sharp input price increases and selling price increases at their fastest pace since 2022, while supply availability continued to worsen. The New York Fed said the business climate was “much worse than normal” and firms had become more pessimistic about the outlook. The business activity index fell 12 points to -20.7, its weakest reading since March.
2. Inflation concerns persist
The survey also pointed to weak capital spending plans and expectations that supply availability would continue to worsen. Its findings on prices came alongside a 1.1% rise in import prices in September and comments from Chicago Fed leader Austan Goolsbee that services inflation showed little sign of improvement. The New York Fed’s October factory survey, by contrast, found business conditions at their highest level in five years, alongside elevated prices and supply challenges.
