Tight labor markets continue to stymie some firms' ability to meet demand, as District states and metropolitan areas continue to post historically low unemployment rates. Labor cost increases, however, remain moderate. Home sales are down from their year-earlier levels, as higher mortgage rates keep away some potential buyers. Banks continue to experience little deposit growth, which is forcing them to seek other sources of funds for loans. Recent rains have restored topsoil moisture levels in parts of the District to adequate levels.
Crops are generally in good condition.
Manufacturing and Other Business Activity Contacts report a pick-up in demand and sales over the past two months. Automobile sales, especially of luxury models, have rebounded from a slow start this year. High gas prices reportedly have had only a marginal effect on sales of SUVs and other vehicles. Demand for nondurable goods, such as food products, is robust. Firms continue to locate their distribution centers in the District because of its central location and its access to the hubs of the major package delivery firms.