There are indications that the economy of the Tenth District may be showing renewed strength. A growing optimism is present in some parts of the District, beyond what may be inferred from current business statistics. Reports from Head Office and Branch Directors support the evidence from the statistical indicators that construction activity and outlook is a relatively bright spot in the economy of the Tenth District. Both residential and nonresidential building are responding favorably to factors such as increasing availability of funds, improving economic conditions, and the resumption of activity following the end of the construction workers' strike in Kansas City. The slowdown in the growth of personal income seems to have been reversed in the District as a whole, and the District unemployment rate has apparently stabilized. Of course, there are variations within the District and among different industries. For example, further layoffs have been announced for several defense-oriented establishments. In contrast, business conditions generally seem stronger in Colorado, New Mexico, and Oklahoma than in the remaining District states. Abnormally severe winter weather also has reduced the pace of economic activity in the northern section of the District. On the whole, retail activity during the Christmas season was reported to have been reasonably good-in many cases, better than earlier expected. Strength in the value of construction contract awards is found in both the residential and nonresidential parts of the industry. Again, the northern section of the District appears to be somewhat laggard as far as construction is concerned. Some Branch Directors from Wyoming and Nebraska report that Section 235 and 236 housing is about the only kind of residential building going on in their areas. In the Omaha area, there is very little in the way of new commercial and industrial projects, only spotty interest in apartment building, and not much custom building of new single-family dwellings. Elsewhere, construction activity is relatively strong-especially in Oklahoma, New Mexico, and Colorado. An upsurge in home building is reported for both Tulsa and Oklahoma City, and both also are experiencing a good deal of commercial construction activity. Albuquerque, too, is having an increase in both multiple-unit and single-family building, and considerable optimism is reported in business circles there-with regard to the general business outlook as well as in housing. Commercial and residential building (both single-family and multiple-unit structures) growth is vigorous in Colorado, both in Denver and in other urban centers as well. There (as elsewhere in these states), strength in housing is reported across the spectrum from smaller, less expensive single-family homes (some due to Section 235 and 236 subsidies) through higher-priced single-family dwellings to high-rise, high-price apartment buildings. The general retrenchment of livestock prices during the last half of 1970-due primarily to the new sharp increase in hog marketings-had a pronounced impact on District farm income. Last year, cash receipts from District farm marketings-73 percent from livestock sales- increased 2.4 percent above 1969 levels, as compared with a 3 percent rise for the nation. However, third and fourth quarter receipts in the District were, respectively, 2.6 and 4.1 percent lower than in the comparable periods for 1969, with both crops and livestock contributing to the decline. There are indications that the District livestock picture may show improvement in 1971. Recent reports point to a likely abatement of the increase in sow farrowings, compared with the levels of a year ago. Likewise, the number of cattle on feed in the District, as of January 1, was 3.9 million head-down 1 percent from 1970. For the nation, the decline was 3 percent. Marketings in the District during the October-December quarter were 11 percent higher than in the year-earlier period, while placements were down 4 percent. Hence, the production adjustments currently underway in the hog industry, together with a likely reduction in fed cattle marketings, point to higher livestock prices in the months ahead. After declining farm prices from March to December 1970 helped to introduce some stability into the overall wholesale price index, the January 1971 increase in the WPI was spurred mostly by rises in the farm products and processed feeds components of the index. In view of the prospects for higher livestock prices, it is unlikely that declining farm prices will exert a stabilizing influence on the overall WPI in 1971.