The continued rapid growth of the Pacific Northwest economy has particularly strengthened the demand for labor in that region. Farm production reports are generally favorable. Kansas City and Chicago expect record crops in such commodities as wheat and soybeans, although storms recently damaged grapefruit crops in Florida and 600,000 acres of cotton in Texas. Pork and poultry production have increased. As a result of the increased production in many commodities, farm prices have fallen, so that farm incomes are likely to fall considerably short of earlier Department of Agriculture forecasts.
Most districts report continued strength in demand for all types of loans.
However, Atlanta reports slack loan demand, and Dallas reports resistance to high residential-mortgage rates. The supply of funds at commercial banks appears to be holding up, with money- market certificates compensating for outflows from other savings categories. Cleveland and Richmond observe, however, that thrifts are experiencing more difficulty obtaining funds. Although the economic picture remains relatively good at the present time, the business community generally appears pessimistic about the future. Respondents to Philadelphia's Business Outlook Survey appear to be bracing for a further slowdown.