Tight labor markets still reign in most of the District, and most contacts report continued strong demand for their products. Sales of new and existing homes have held up well, and new construction remains strong overall. Compared with the average of three months earlier, the most recent Manpower survey indicates some tempering of the demand for labor in the fourth quarter. Loan demand at several large District banks appears to have slowed during the past two months. Consumer Spending District retailers report that sales in July and August were up 4 percent on average over a year earlier, which met or exceeded their expectations.
Current inventories are smaller than earlier.
Contacts have not yet observed a falloff in sales because of the swings in the stock market and are optimistic about sales prospects for the rest of the year. The District's GM dealers contacted saw sales fall by an average of 25 percent in July and August from a year earlier because of lack of product. Other dealers report that sales were flat to up moderately. GM dealers do not anticipate wide usage of rebates or other incentive programs any time soon, mostly because of reduced inventories, although many other dealers do. Overall, contacts are cautiously optimistic about sales prospects for the rest of the year.