The capital spending picture may require reevaluation, as industrial firms and utilities announce cutbacks or postponements in their plans for expenditures. Agricultural prospects for crops and feedgrains have improved somewhat since early August, but the situation in the livestock industry is dismal. Savings outflows from thrift institutions continued in August, and banks in some Districts are also experiencing losses in deposits. Business loan demand remains strong, but is being curbed as bankers are becoming more selective in allocating credit. There is widespread concern among businessmen, bankers, and economists over the current and prospective effects of tight money.
Consumer spending is described as sluggish or weakening in almost every District.
Sales of appliances and home furnishings, in particular, are depressed. Philadelphia reports widespread consumer resistance to higher prices on the new fall line of soft goods. Chicago says spending on discretionary goods is slow, and that recovery in recreational vehicles has ended. A number of Districts mention problems of excessive inventories at the retail level. New car sales seems to be an exception in the generally lackluster consumer sector.