Manufacturers report a slight drop in shipments and orders in October. Although retailers indicated that consumer confidence remains high, retail sales have risen by only a modest amount compared with last year. Auto sales have slipped but remain above last year's level. Bank lending has edged down as declines in consumer and real estate lending have outweighed a small gain in commercial and industrial loans. Manufacturers as a group expect a rebound in demand, but not in all industrial sectors.
Bankers anticipate a pickup in lending, but they expect growth to be slow.
Tight labor market conditions prevail in the District. Firms in many industries report difficulty meeting their needs for workers, and several companies indicated that they have raised wages by greater amounts this year than in the past few years. The upward trend in input prices continues at area manufacturing plants, and the number of retailers reporting increases in wholesale prices is growing. However, both manufacturers and retailers indicate that competitive pressure is limiting their ability to pass cost increases along to their customers. Manufacturing Manufacturing activity was edging down in mid-October.