NY Fed: Regional Service Sector Continues to Decline

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The results of the most recent Federal Reserve Bank of New York Business Leaders Survey indicates that the service sector in the New York-Northern New Jersey region continued to slump in December. The top line business activity index remained in negative territory as did the business climate Index. The activity index has been below zero since October 2024, but the current December reading of -20 is slightly better than the prior month’s -21.7. The climate index on the other hand, hasn’t been in positive territory since August 2021, and the December 2025 reading of -44.2 is the worst since June 2025. The employment index has been negative for four consecutive months, but December’s -7.4 was a tick better than November’s -8.6. Finally, the capital spending index was negative for the third consecutive month at -6.9. 


The six-month forward indexes told a slightly better story. The forward employment index held to a minimally positive at +3.8. While the forward business activity and climate capital indexes remained in negative territory, they both exhibited some improvement, with the activity index moving to -1.1 from -4.6 in November, and the climate index improving to -19.5 from -30.7. The forward capital spending index, which had been negative for two consecutive months, moved back into positive territory in December with a reading of +4.4 compared to November’s -0.5.


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