KC Fed Services Index Turns Negative in August

The results of Federal Reserve Bank of Kansas City’s August Services Survey indicate a weakening services sector in the Tenth Federal Reserve District. The top line composite index moved into negative territory for the first time since November 2025, falling to -3 in August from 14 in July. Similarly, the general revenue/sales index fell to 0.0 in August from 19 in the prior month. The employment indexes, employee count, part-time employment and hours worked, were all in the negative single digit range, but it should be noted that these indexes have been bouncing between single digit positive and single digit negative all year. The declines in the six-month expectations indexes were particularly grim, with the composite index falling to 5 in August from 24 in July, and the general revenue/sales index falling to 12 from 39. Finally, the employment six-month expectations indexes all moved from modestly positive to modestly negative territory. One survey respondent noted that “business remains poor and uncertainty remains high”, while another observed that “consumers continue to be cautious and affected by high gasoline and food prices.”.