Dallas San Francisco Full report The pace of current economic activity weakened slightly in the Sixth District since the last Beige Book, according to business contacts, but the outlook remained positive. Merchants' sales were somewhat above those of a year ago, and expectations are positive for holiday sales. Factory orders and production weakened recently, but more industry contacts expect recovery over the next few months than was the case in the last Beige Book. The tourism and hospitality sector is mixed with good domestic business, but there is growing concern that weakness in overseas economies will continue to hold back foreign tourists. Tight labor markets continue to constrain District employers, but significant wage escalations remain limited to a few sectors.
Prices remain stable, with a few exceptions.
According to District retail contacts, sales during September and early October were up slightly compared with last year. Early October sales were somewhat stronger than September sales. However, most merchants said that recent sales had met or fallen below their expectations, and many retailers report uncomfortably high inventories. Apparel sales remain strong, while shoe sales have been weak in recent months. Looking forward, most merchants expect holiday sales will be up slightly compared with last year.