Abundant agricultural supplies threaten to depress many crop prices, thereby reducing net farm income even further despite more favorable conditions for livestock producers. In the financial sector demand for both business and consumer loans in most Districts is characterized as soft, while deposit growth remains sluggish. Most Districts are not optimistic regarding the outlook for recovery in 1982. There is virtually no indication that a consumer-led economic recovery is underway. Sales of soft goods continue to outperform such consumer durables as household furnishings, and new auto sales remain depressed.
Caution seems to be the key trait in the retail sector.
Despite slow-rising retail sales, due in part to buyer uncertainty about jobs and still high interest rates, merchants are apparently satisfied with inventory levels. Retailers have been trying to keep a tight rein on inventories and are buying cautiously for the December holiday season and winter. With the exceptions of Dallas and New York, most Districts describe a further slowing of industrial activity in September. Production, employment, orders, and shipments are weak, and additional layoffs and shortened workweeks are reported. Cleveland finds that manufacturing activity has yet to trough and the outlook for the steel industry is dismal.