Philadelphia sees inflation as the sore spot in its economy, with price increases on manufactured items and raw materials continuing throughout the year. This view was echoed by Atlanta, St. Louis, and San Francisco, while Cleveland expects some abatement in price increases by the fourth quarter. Though supply problems continue to exist, some easing is beginning to be noticed. Boston, Richmond, and Chicago note some loosening in supplies. However, other Districts indicate continued difficulties and longer lead times in obtaining plastics, basic petrochemicals, steel, and electrical goods.
Residential construction remains universally weak in all Districts.
In Minneapolis, San Francisco, and St. Louis, strikes in the construction trades have depressed this sector even further. The Administration's new housing program is expected to have only a slight impact on residential construction. Capital spending continues to be the major area of strength, but some retrenchment in these spending plans may now be taking place. Boston reports some postponing of capital spending because of anticipated declines in interest rates. Materials shortages are curtailing capital spending in the San Francisco District.