Key facts
- Service sector businesses reported sharp input price increases and faster selling price growth in October.
- The New York Fed's Business Leaders Survey found the business climate was "much worse than normal."
- The headline index for current business activity dropped to negative 20.7, its weakest reading since March.
Service sector businesses reported widespread pricing pressures and a downbeat outlook in October, according to a report released by the Federal Reserve Bank of New York. The pace of input price increases remained sharp, and selling price increases picked up to the fastest pace since 2022, while supply availability continued to worsen. The business climate was described as "much worse than normal," with firms becoming more pessimistic about the outlook and current business activity weakening. The headline index for current business activity dropped 12 points to negative 20.7, its weakest reading since March. These findings on inflation mirror other statistics showing persistent price pressures, partly attributed to trade tariffs and Middle East conflict-driven energy costs. The survey also indicated weak capital spending plans. Separately, the government reported a 1.1% surge in import prices in September.