This report is based on three special surveys, all of which were concluded prior to the President's speech of August 15. The surveys indicate that businessmen, bankers, and retailers expect slow growth and inflation in the coming months. The retail sales outlook is mediocre, partly because of uncertainty among consumers. A slowing in the growth of consumer time and savings deposits is expected to continue. Business loan demand is reported moderate, and no strong upswing is foreseen.

In the past few weeks, a survey was made of businessmen and bankers located in areas experiencing either high or low unemployment. Businessmen located in areas experiencing high unemployment cite defense and aerospace layoffs, sluggish manufacturing growth, poor consumer sentiment, and rapidly growing labor forces as causes of high unemployment. In only one of the surveyed areas, Miami, did an interviewee anticipate substantial improvement in economic conditions during the next few months. On the other hand, none of those surveyed expect their economies to deteriorate further in the near future. In Miami, a large increase in consumer liquidity was mentioned as the source of a potential consumer spending boom. A banker in another high unemployment area, however, thought that it would take a great turnaround in consumer sentiment to dislodge savings.

Businessmen and bankers in low unemployment areas cite either construction booms or a stable economic base as a reason for low unemployment. In areas such as Jackson, Mississippi; Macon, Georgia; and Jacksonville, Florida, a surge in construction is leading strong economic advances. Such stable employers as state governments and universities are cited as reasons for low unemployment in other areas. None of the interviewees from low unemployment areas foresee significant changes in the prosperous conditions of their local economies during the next few months.

A sampling of retailers indicates that sales increases have moderated recently and that price markups continue. Only modest retail sales gains are anticipated for the fall. Inventories are reportedly "on target." Price increases from suppliers continue but not at an accelerating rate. Retail price increases are expected to continue at a brisk pace. As a result of the steel price increase, a rather large price increase is anticipated for appliances.

Bankers through the District are detecting a slight slowing in the growth of consumer time and savings deposits. The growth of 90-day maturity deposits—often called golden savings—has held up better than the growth of passbook savings and CD's. The slower growth of consumer time deposits was mentioned as a reason for aggressive bidding for large negotiable CD's. One major bank in the District has increased its negotiable CD's—as a result of a concerted effort— by more than 60 percent since May.

Bankers cannot agree upon the reasons for the slower growth in consumer time deposits. Several bankers think it is because of the rise in market interest rates, especially as reflected in the AT&T preferred issue and the latest Treasury refunding. Other banks feel that consumers are becoming increasingly aware of the higher rates paid by S&Ls. Others cannot explain the slower time deposits growth, only noting that the accumulation of consumer deposits in the last year has been very large. Most of the banks interviewed expect the slower growth in consumer time and savings deposits to continue. There are some fears of disintermediation, especially when 5 3/4 percent, two-year CD's mature early next year. Banks in several areas are expecting time and savings deposits to be used to pay private school tuition next month.

No substantial change in the strength of business loan demand is expected in the next few months. One banker reports that businesses would like to enter into term loans with seven-to-eight-year maturities. This banker said he was reluctant to make such loans, but when he did, the loans always contained a variable rate clause.