State Economic Watch

Manufacturing activity in New York State was broadly stronger in October according to today’s Empire State Manufacturing Survey from the Federal Reserve Bank of New York. The headline general business conditions index jumped +17.9 points m/n to +25.5. This was the strongest reading for this index in five years. Similarly, both the new orders and shipments indexes moved sharply higher with the new orders index climbing to +23.2 from +2.0 in September, and the shipments index increasing from -3.2 in September to +13.1 in October. The employment indexes didn’t follow the same pattern however, with employee count remaining essentially flat m/m at +10.3, and hours worked falling 7.9 points m/m to +9.1. Despite the strength in the current conditions indexes, the six-month forward looking indexes were mostly lower in the October survey, with the general business conditions expectations index falling 8.0 points m/m to a reading of 21. The new orders index was also down modestly while the shi...

According to the results of the latest Survey of Regional Conditions and Expectations (SORCE) from the Federal Reserve Bank of Cleveland, AI adoption by District firms has not resulted in a reduction in employment. In the survey, taken from September 17 through September 24, 87% of respondents reported that their firm’s use of AI “did not change their staffing levels”, while 11% said it actually increased them. Of the respondents to the September survey, 81% said they had “used AI for business processes or tasks in the past six months”.

Pennsylvania Governor Josh Shapiro yesterday announced a “$371.5 million investment of capital funding from the Commonwealth” in the Port of Philadelphia. According to the press release from the Governor’s office, the state’s investment will unlock “over $200 million in private-sector investment and $266 million from the federal government” and will “support the largest expansion in its history, allowing the port to significantly expand its capacity and create more than 6,000 jobs”.

The Summer 2026 Alaska Fuel Price Report from the Alaska Division of Community and Regional Affairs puts the average price of gasoline in rural Alaska at $7.56 a gallon and the average price of home heating oil at $7.97 a gallon. The figures in the report are based on a survey of 100 communities taken between July 15, 2026 and August 24, 2026. The report notes that “with the $7.97 average in the 90 surveyed, unsubsidized communities and the $5.54 national average, the statewide average in Summer 2026 is 44 percent higher than the national average”. While the figures quoted in the report are somewhat dated, it does make clear that, due to transportation challenges and other issues specific to rural Alaska, the state’s rural communities pay a significant premium for fuel compared to the Lower 48. 

Business leaders in Tennessee are more optimistic about their home state’s economy than that of the nation, according to the latest survey from the Boyd Center for Business and Economic Research. In its Tennessee Business Leaders Survey Summer 2026 Report, the Center, part of the Haslam College of Business at the University of Tennessee, Knoxville, reported that 57% of respondents to its August 2026 Survey expect the state's economy to improve over the next 12 months, while only 33% said the same about the US economy. Additionally, almost 64% of respondents thought the state was on the “right track”. About 30% expect to increase employment over the next 12 months, while almost 55% expect employment levels to "stay about the same”. Finally, about 35% expect their respective companies to increase capex expenses in the coming year, while 45% said their capex spend will remain at current levels. 

A new report from the Washington Policy Center and the Buckeye Institute concludes that “Washington's 9.9% income tax on earnings above $1 million (Senate Bill 6346) would bring in money for the state but leave Washington with fewer jobs, less economic growth, and less business investment than it would have had without the tax”. It notes that “establishing a new income tax risks future legislatures raising the initial tax rate and inevitably levying the tax on ever-lower income thresholds” and that “although the tax generates additional state revenue, economic activity weakens, with output, employment, consumption, and investment falling below their respective baselines”.