Economic activity in the Eighth District generally remains strong. Manufacturing output continues to increase with the exception of housing-related products. The supply situation for most raw materials appears to have eased with the removal of wage and price controls. Little change was reported in the dollar amount of retail sales, except for appliances which were down somewhat. Employment is little changed from the beginning of the year, and the unemployment rate in the Eighth District remains well below the national rate. The agricultural situation is somewhat mixed, with the effect of recent cold weather not yet known.

Manufacturing firms in the capital goods and heavy equipment industries report strong demand for their products. The demand for steel continues especially strong, although part of the demand may be transitory, reflecting the expectations of a coal strike and higher steel prices following the settlement. Many firms are apparently stockpiling steel and long delays for delivery are reported. The only major weaknesses in manufacturing appear to be those industries which are housing-related, such as lumber and appliances.

Raw materials shortages have generally eased in recent weeks. Wood and lumber shortages have disappeared as a result of the removal of price controls and the slackened demand in the housing industry. Fewer shortages were also reported in the paper and paperboard industries. Some shortages are still reported in chemicals, especially petrochemicals, and in the steel and aluminum industries, but the supply situation in other metals such as brass and copper appears to be easing.

Major retailers report that sales in dollars have in general not changed significantly in recent weeks, although appliance and wholesale clothing sales are down, and shoe sales apparently have leveled off after slowing in the early months of the year.

Employment in the District continues at a generally high level. Employment has shown some recent upturn, partly as a result of strike settlements, and no widespread layoffs are reported. The unemployment rate in the District remains relatively low, well below the national rate.

The agricultural situation is not clear. The effect of early frosts in the northern parts of the District has not been fully assessed, while in the southern parts of the District, harvests have been delayed by heavier than usual fall rains. Yield prospects for rice, cotton, and tobacco are good, while corn and soybeans yields will fall below levels of recent years due to the drought during the summer months.

The demand for business loans has apparently leveled off following a sharp uptrend in the early months of the year. One large bank reported no increase in business loans for several weeks. Savings and loan associations generally report that they are able to meet previous commitments but are not making new home loans. The associations have recently experienced a net outflow of savings, although some report that the runoff was less than expected. The movement from passbook accounts into four-year certificates at thrift institutions was reported to be continuing.