AXP American Express Company

New York City business activity snapped back last month after tumbling to a six-year low in September, a report showed Tuesday, though some details paint a weaker picture.

The New York chapter of the Institute for Supply Management said its current business conditions index, based on a survey of businesses across New York City, bounced to 65.8 from 44.5 in September. In August, the index stood at 51.1. The reading, firmly above the expansion threshold of 50, is the best since July.

The report is the latest in a string of regional indicators that have recently shown improvement, but that reveal softness under the hood. A Chicago-area index last week, for example, unexpectedly recovered to a nine-month high, but the business barometer's employment gauge nearly flatlined while backlogs remained firmly negative.

The New York City business activity reading comes as companies across the city are reporting earnings for their latest quarters. Financial firms including Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Blackstone Group LP pointed to tumultuous markets, rocked by concerns over global growth, for disappointing results, and card company American Express reported sluggish spending. Some New York companies outside of the financial sector, like drug giant Pfizer Inc., managed to report better-than-expected third-quarter results.

According to Tuesday's report, relief was recorded in questions related to the New York metro area, but not in questions related to company-specific activities.

Across the city last month, job growth and purchase volume both contracted back-to-back for the first time in three years, the report said. The employment gauge inched up to 46.3 from 44.9, well below August's 65.8, while the purchases subindex rose to 46.2 from 43.8, down 11 points from August.

Meanwhile, companies said they expected sharply lower revenue over the next six months—the lowest in two years—as current sales remained cool.

Respondents said inflation was a top impediment. Pricing power diminished further in October, with prices received dropping about nine points to 40.9 after flatlining in September. After two months of modest increases, New York City businesses saw a decline in prices paid, to 46.2 from 58.8.

Cost of benefits was also identified as a major impediment, the report said. Some employers have been shifting toward higher benefits from higher pay, highlighting the fragility of an expansion where employers remain hesitant to commit to higher wages and are turning instead to more revocable perks.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

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(END) Dow Jones Newswires

November 03, 2015 10:15 ET (15:15 GMT)

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