Auto sales have slumped with the ending of rebate programs. Signs of weakness are also beginning to appear in the manufacturing sector. Overall production is still holding up in most districts but new orders have fallen off. Manufacturers supplying the automobile and construction industries are cutting back production and several districts report substantial layoffs. Both manufacturers and retailers are thought to be watching inventories closely, although recent developments have induced further trimming in some areas.
Residential construction is said to be at a standstill.
Commercial and industrial loan demand remains strong. There has been an abrupt deterioration in farm incomes. Almost every district has seen a softening in retail sales. San Francisco is the exception reporting firm to brisk activity. Department store sales are down across the country in real, if not always nominal, terms.