Corn and soybean yields are up in most District states. In a few cases, sales are down by more than 10 percent. Nearly all contacts note that sales growth has not met expectations. Unseasonably warm weather in October led to lackluster sales of several items, particularly winter clothing, shoes and outerwear. More recently, though, sales have rebounded somewhat, with items such as fine jewelry, toys and video-game consoles moving quickly.
Most contacts note that inventories for the upcoming holiday season are at desired levels.
Retailers are cautiously optimistic about sales during this holiday season, with many expecting growth of about 5 percent over a year earlier. Those retailers that conduct business over the Internet expect online sales to post very strong growth over last year. Higher interest rates and a recent dip in consumer confidence have been cited as reasons. Although expectations about sales for the rest of the year are mixed, more than half of the dealers are optimistic that sales will pick up in December. Manufacturing and Other Business Activity Contacts report that demand and employment growth have moderated over the past two months.