State Economic Watch

Conditions in the New York-Northern New Jersey service sector appear to have weakened in September according to the results of the Federal Reserve Bank of New York’s Business Leaders Survey . After being briefly above zero during the summer, the top line business activity index returned to negative territory, dropping to -8.7 in September from +0.5 in August. Similarly, the business climate index declined 10.2 points m/m to a pessimistic -35.9. It should be noted that the business climate index hasn’t been in positive territory since 2021. Employee count also shifted from positive to negative, falling 7.3 points to -4.9 in September, while wages held steady. The six-month forward expectations indices all moved lower m/m, with the forward-looking business activity index falling 4.3 points to +5.0, and the business climate expectations index moving 2.5 points lower to -19.0. The forward-looking employment and capex indexes also declined m/m but remained in positive territory. However, t...

Senators Tim Kaine and Mark Warner have introduced a bill to reduce traffic at Washington National Airport (DCA) in order to improve safety. The bill would cap arrivals to no more than 28 in a 60 minute period, establish limits to reduce flight clustering, and eliminate 30 flight slots over five years. The proposed legislation is in response to the mid-air collision near DCA last year that killed 67 people. You can find a link to the press release from Senator Kaine’s office here . 

The employment situation in New Mexico isn’t expected to improve anytime soon, according to the new Consensus Estimate from the state’s Consensus Revenue Estimating Group. The forecast calls for annual growth in state nonfarm payrolls of less than 1% through the forecast period (FY31), with employment growth of 0.1% estimated for FY26 compared to 1.2% in the previous forecast (December 2025). The new August forecast attributes this reduction, in part, to cuts in the federal workforce instituted over the past year. However, the out years don’t look much better, with payroll growth of 0.6% projected for FY27 and 0.2% for FY28. Real state GDP growth of 1.9% is forecast for FY26, 1,5% for FY27, and 1.3% for FY28.

Manufacturing activity in New York State eased modestly in September according to today’s Empire State Manufacturing Survey from the Federal Reserve Bank of New York. The headline general business conditions index fell 13 points m/n to a still positive reading of +7.6. Similarly, both the New orders and shipments indexes fell, but new orders remained positive at +2.0 while shipments moved into negative territory at -3.2.  The employment indexes were firm however, with employee count improving to +10.6 from +9.3 in July, and hours worked increasing 10.1 points m/m to 17.0.  Finally, the six-month forward looking indexes were mostly modestly lower in the September survey, with the general business conditions expectations index falling 3.1 points m/m to a still positive +29. The new orders and shipments expectations indexes were also down modestly but remained firmly in positive territory, while the capex expectations index was a touch lower but essentially unchanged at 14.9. Th...

A report from the Los Angeles County Economic Development Corporation, leaked by Politico on Saturday, concludes that the economic cost of the threatened relocation of Paramount from California could be quite costly to the state. The report estimates that a full withdrawal of Paramount operations would result in a loss of up to 58,000 jobs and a reduction in total economic output of over $21 billion annually. The relocation threat is the product of the dispute between Paramount-Skydance and a coalition of state attorneys general who are seeking to block its proposed merger with Warner Brothers Discovery.

Non-current mortgages moved lower in July, according to the most recent ICE Mortgage Monitor . The service reported that total non-current mortgages nationally dropped to 3.9% in the month compared to 4.1% in June, with the delinquency falling to 3.4% from 3.6% in the prior month, and foreclosures holding steady at 0.5%. However, both of these figures were higher y/y. Delinquency and foreclosure rates were the highest in the South and Midwest, with Louisiana (8.2%), Mississippi (8.1%), Alabama (6.0%), Indiana (6.0%), and Arkansas (5.6%) comprising the top five. The states with the best performing mortgages in July were concentrated in the West, with Idaho, Montana, Washington, California, and Oregon reporting the lowest non-current rates, all 2.4% or less. The states seeing the greatest y/y increase in non-current rates were Hawaii (28.7%), Colorado (+17.2%), Michigan (+16.4%), Kentucky (+15.8%), and Indiana (+14.1%). New York, South Dakota, Wyoming, and Idaho say y/y declines in thei...