A moderate uptrend in business activity continues in the Eighth Federal Reserve District according to a select group of businessmen. Retail sales continue to expand in most of the larger centers. Orders from manufacturers have been spotty in recent weeks, but were generally higher on a seasonally adjusted basis than earlier in the year. The employment situation is generally unchanged from a month ago. There has been a pause in the rate of savings growth and interest rates have continued to inch upward. Some banks, however, still indicate a higher than desired level of liquidity and are aggressively seeking business loans.

Although retail sales remain sluggish at major department stores in St. Louis, other District centers report sharp increases. One of the major St. Louis outlets reported early August sales to be a continuation of the rather dismal level in July. Another reported some slight improvement of sales in August from the July level but well below sales in June. In contrast to this experience, major retail stores in both Memphis and Louisville reported sharp gains in sales in July and August from previous months, on a seasonally adjusted basis, and from year-ago levels. One of the leading Louisville firms reported that August-to-date sales are up 12 percent from year-ago levels. Similarly, total retail sales in Memphis have in recent months exceeded year-ago levels by 15 percent according to an official of a large department store.

The outlook for manufacturing activity ranges from pessimistic to quite optimistic, depending on the type of product. Manufacturers of software and products associated with home construction report optimistic levels of sales and orders. On the other hand, steel producers and replacement durable goods manufacturers are generally pessimistic in their outlook for the next few months. Steel producers report large inventories in the hands of consuming firms and low production prospects for the next six months while the inventories are being reduced. After the current inventories are depleted, the outlook for steel is more promising. The replacement market for durable manufacturers is reported as being generally soft but improving slowly.

Nine of the businessmen interviewed reported significant changes in employment prospects. Some layoffs which have occurred in steel industries have apparently been offset by new hirings by manufacturers of home building and allied products. Most of those interviewed, however, reported little change in number of employees, which indicated that new hirings only slightly exceeded the number leaving the firms.

Savings flows into financial institutions have continued to decelerate from the very high rates of last spring. The slowing has been most pronounced at commercial banks, but a slower rate of savings growth has also been observed at savings and loan associations. An occasional increase in rates paid to savers has been announced in recent weeks. Some banks which lowered the rates paid on passbook savings last spring have recently raised their rates back to Regulation Q ceilings. Rates on loans also continue to creep upward. Nevertheless some banks continue to aggressively seek business loans.