While the region's labor market remains firm, prospects for job and income losses on Wall Street appear to have dampened consumer confidence. Regional surveys of purchasing managers suggest continued weakness in manufacturing activity in September, but fairly sturdy growth in non-manufacturing sectors. Finally, local banks report a pickup in loan demand largely for home mortgages and steady to declining delinquency rates. Consumer Spending Retailers report that sales in the region were below plan in September but on or close to plan in the first three weeks of October. Much of the weakness was in apparel, with some retailers citing mild weather.
Most contacts note that home goods continued to perform well.
Major retailers report they are unaffected by shipping bottlenecks. Retail selling prices and merchandise costs were generally steady, and are expected to remain so through the upcoming holiday season. However, price reductions are widely anticipated on Spring 1999 merchandise mainly imported apparel and electronics. Retailers report steady wage pressures, but express concern about adequate staffing for the upcoming holiday season. Some pockets of weakness have emerged in the District's generally strong housing market in recent weeks.