Reports from Reserve Banks this month are, on balance, more cheerful than were those of last month, at least with regard to both current and prospective business activity. The improvement in the assessment of business conditions is attributable primarily to several Districts who see the recession as having bottomed out or as ending soon. Several other Reserve Banks, however, continue to report weakening economic activity, with no prospects for a recovery beginning before the end of the year. With regard to inflation, a consensus view is not clearly discernible. Some Districts report an easing of price pressures at the materials and retail levels because of weak demand, while others hear nothing from manufacturers that suggests a slowing rate of inflation.
Most Districts report slowly rising deposits at commercial banks and at thrift institutions.
Commercial banks say their interest rates are higher and their lending is on the weak side. The most notable development appears to have been in mortgage lending, where renewed strength is being sapped by rising mortgage rates. Business Conditions and Outlook. Production and sales in the United States stabilized further in recent weeks and prospects for recovery improved, judging from Reserve Bank reports. Boston, Philadelphia, Richmond, St. Louis, and Minneapolis, who last month reported further deterioration in their District economies, now report business conditions are firming up.