Despite some signs of softening, economic conditions in the Second District remain somewhat favorable, with growth continuing at a moderate pace. Cost pressures appear to have abated somewhat since the last report, and prices of finished goods and services continue to be stable.
Labor markets remain tight, though somewhat less so than in the last report.
Purchasing managers report mixed to improved conditions in manufacturing in March. Bankers report a strong pickup in demand for home mortgages, steady delinquency rates, and tighter credit standards on commercial loans and nonresidential mortgages. Compared with a year ago, same-store sales for the two months combined appear to be running between 0 and 4 percent higher. While most contacts cite unseasonably cool weather as a factor in sluggish Spring sales, most of the softness was attributed to underlying weakness in demand resulting from reduced discretionary income and low consumer confidence. Retail contacts indicate that selling prices, merchandise costs and promotional activity continued to be virtually unchanged from a year earlier, though utility costs have risen substantially.