State Economic Watch

The responses to Federal Reserve Bank of Philadelphia’s Nonmanufacturing Business Outlook Survey were mixed in October. The top line firm specific general business activity index rose to +12.9 in October from +0.3 in September, but the regional general business activity index slipped to -23.6 from -22 in the prior month. Similarly, the employment indexes weakened m/m, with the full time index falling from +19 to a still positive +12, and the part-time employment index dropping to +1.3 from +10.7. However, the average workweek index firmed to +11.3 in October from +8.5 in September. While the capex indexes also fell, 44% of respondents expect 2027 capital spending to be higher than in 2026, for a diffusion index reading of +18.5. Finally, the six-month general forward business activity indexes declined m/m, but the firm specific activity index remained positive at +11.3 compared to +20.3 in September, while the regional expectations index fell to a negative -9.0 from +2.0 in the p...

This blog has previously reported on the controversy surrounding the federal government’s plan for the allocation of Colorado River water. The release of the federal government’s plan in August was driven by the inability of the seven states that share the Colorado River water to come up with a plan for managing the river’s decreased flow.  According to the press release from Arizona Governor Katie Hobbs’ office, the state is joining Nevada’s lawsuit against the US Interior Department “to hold the federal government accountable for failing to enforce Upper Basin water delivery obligations to Lake Mead and prevent cuts of up to 3 million acre-feet per year”. The press release further notes that the federal government’s plan would “slash the Central Arizona Project’s Colorado River allocation by 77% over the next two years”.  

A new study from the National Housing Conference concludes that Ohio saw the biggest decline in home ownership affordability among US states during the period 2020 through 2025. The study compared the income and home ownership costs in 390 metropolitan statistical areas (MSA) in the US. According to the report, Ohio’s MSAs saw a nearly 41% decline in affordability. However, Ohio wasn’t much of an outlier, as any other states were close behind. Arkansas, Indiana, New York and Illinois rounded out the top five and all posed declines in affordability of over 36% in the study period. 

Conditions in the New York-Northern New Jersey service sector continued to deteriorate in October according to the results of the Federal Reserve Bank of New York’s Business Leaders Survey . The top line business activity index moved further into negative territory this month, dropping 12 points to -20.7 in October from -8.7 in September and +0.5 in August. The business climate index, which was already firmly in negative territory, was essentially unchanged in October at -35.0. The employee count index was a touch better m/m, moving from -4.9 in September to a neutral 0.0 in October. The six-month forward expectations indices generally moved lower m/m, with the forward-looking business activity index falling into negative territory for the first time since December 2025 at -5.1 in October from +5.0 in September, and the business climate expectations index falling 1.8 points lower to -20.8. The forward-looking capex index also moved negative for the first time since late 2025, falling 4...

For the second consecutive month, the indexes that make up the Federal Reserve Bank of Philadelphia’s Manufacturing Business Outlook Survey moved lower, but remained in positive territory. The top line general business activity index fell to +20.9 in October, from +37.8 in September and +47.4 in August. New orders and shipments were also down notably, with new orders falling to a just positive +4.3 in October from +29.2 in September, and shipments dropping to +15.3 from +27.7. The employment indexes also posted moderate m/m declines. The forward-looking six-month expectations indexes posted sharp declines, with the general business activity index falling to +33.0 in October from +52.9 in September and +73.6 in August. The other expectations indexes generally posted similar m/m declines. Finally, 52.2% of respondents expected higher total capital spending in 2027 than in 2026, with 47.8% indicating that their total capex spend would be unchanged next year. 

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...