Most businessmen, lenders, and economic analysts in the Seventh District expect a gradual rise in general activity throughout 1971. But it is impossible to disentangle individual views from the conclusion of "experts" now publicized, more widely than ever before, in newspapers, periodicals, and on television. Many decision makers respond favorably to the general idea of an "incomes policy," but their statements usually are so vague as to be classified as gibberish.

Prices and terms of trade in the wholesale markets reflect increasingly competitive conditions. If these trends are also present at the retail level, it is through special sales and promotions, not readily subject to measurement. Announcements of price increases are less frequent than a year ago and announcements of decreases are more frequent. Delivery times are shorter, order backlogs are lower. Continued large increases in worker compensation, however, convince many manufacturers that further price increases for their products are essential. Reductions, or slower than expected growth, in volume relative to capacity also are offered as arguments for higher prices. This is particularly evident in public transportation and regulated public utilities.

Overall employment in this area appears to have stabilized. Unemployment probably is continuing to rise, but at a slower rate. Help-wanted ads are about 50 percent below the year earlier level in the Chicago area. Response to such ads is extremely heavy compared with any period of the past several years. Unemployment among people of long experience, and those with professional and executive experience, is probably the most widespread since the 1930's. This situation is related to cost-cutting efforts aimed at reversing declines in profit margins. Employees of divisions of conglomerates are especially vulnerable.

Scattered evidence suggests that the improvement in most types of retail sales, which developed shortly before Christmas, continued in January. Buyers are still cautious, however, on purchases of luxuries and big ticket items.

General Motors has reduced overtime schedules because its inventories of finished cars are being rebuilt rapidly. Other motor vehicle producers have been operating at reduced levels in recent weeks.

The steel industry provides the most optimistic reports, currently, from any District industry. Orders for steel are said to have picked up "rapidly" in recent weeks. This development is believed to be more than a mere reflection of the prospect of a strike next August 1.

Some manufacturing firms will increase, or maintain, capital expenditures in 1971. In total, the physical volume of fixed investment by business firms, with the exception of utilities, doubtless will be lower. New commercial building projects are much less frequent than a year ago.

Prices of meat are expected to remain firm, following declines in 1970. Prices of farmland in the District turned up in the fourth quarter after two years of decline. Greater availability of credit may have produced this result in the face of declining net farm income. Rural banks are now more interested in real estate loans. These banks always are slow in following general trends. Recently, they have cut rates on feeder cattle loans.

All savings associations we know of have reduced rates on mortgage loans once or more in the past month or two, with total reductions averaging about one half of one percentage point. Further rate reductions are expected. Relatively few of these institutions have lowered down payments, reduced fees, lengthened maturities, or eased credit standards.

Business loan demand at commercial banks continues very slow, but some institutions think the trend has firmed recently. Not only have rates been cut substantially on large CDs, but there is no interest in obtaining funds through this route. Some banks have eliminated or restricted sales of consumer CDs. Some smaller banks would like to see the board reduce the ceiling rate on passbook savings.