Some Districts report continued improvement in early June while others report retail sales falling back from their May levels. Retailers are at best cautiously optimistic about sales for the second half. They are reported to be conservative about ordering goods and keeping a tight rein on inventories. While some look for sales to increase in response to the tax cut and social security increase, others expect consumers to emphasize saving and paying down debt. Manufacturing activity generally remains depressed, with new production cutbacks seeming to outweigh the few production gains.
Most Districts report either declining or flat orders, shipments and backlogs.
Some increases in motor vehicle production are reported, but production of steel and machinery is depressed. Dallas reports firms selling to the petroleum industry are making particularly large cutbacks. Paper production is still being cut but lumber production has stabilized at a depressed level. San Francisco reports cutbacks in commercial aircraft and electronic equipment production more than offset gains in aerospace defense equipment. Reductions in mining activity are widespread.