The level of economic activity appears to be declining in most districts. The Persian Gulf situation is frequently cited as a key determinant of both current and future economic activity. Nominal retail sales during the holiday season differed little from a year earlier.
Inventories are near their desired levels.
Despite continued export growth, manufacturing orders, employment and shipments have weakened. Construction activity continues to slow in most districts, and interest rate declines have done little to stimulate residential housing demand Inflation does not appear to be accelerating. Widespread weakness exists in home sales and consumer and business loan demand. Some state and local governments are experiencing revenue shortfalls. Farm income prospects have weakened somewhat, while the mining sector shows strength.