Reports of continued inflation are also widespread. With the exception of home mortgages, loan volumes were reported to be strong in most districts prior to the recent runup in rates. Spotty current reports indicate a subsequent weakening of loan demand. Financial institutions are experiencing considerable conversion of savings deposits into money-market liabilities, and there is widespread concern about the consequent effect on the cost of funds and institutional profitability. The agricultural sector is apparently in good shape in most districts.
Most districts report generally strong industrial activity.
New York, for example, reports brisk new orders and generally steady activity. Dallas finds continued, but slowing, growth in manufacturing. Dallas finds high levels of activity in the petroleum industry. In contrast to these reports, Philadelphia describes weakening manufacturing activity and the trimming of factory payrolls. Kansas City and Richmond also find some softening in the general level of business activity.