Continued:

Labor Markets

Labor market activity weakened since our last report. Contacts at
several employment agencies described demand for workers as softening in
the past six weeks. In Richmond, several small retailers said that they
did not hire summer workers and they were not planning additional hiring
for the year-end holiday selling season. One agent noted that demand was
slightly below normal for this time of year, but he hoped to see a
rebound similar to the one that occurred late last summer. However, a
few pockets of strength persisted. For example, most employment agencies
continued to report strong demand for highly skilled IT employees, as
jobs created by new technologies drove the market for those workers.
Additionally, several contacts noted an increase in demand for truck
drivers. According to our recent surveys, wages in both the
manufacturing and service sectors were growing at a slightly slower pace
than a month ago.

Tourism

District resorts reported a very good summer season, with rentals
and hotel bookings up from a year ago. Local restaurants and shops have
been busy, and a contact on the Outer Banks of North Carolina said that
new businesses were opening to serve vacationers. Cruise ships leaving
the Port of Baltimore have been fully booked, according to a contact
there. In Washington, D.C., a contact observed more tour buses in recent
weeks and bigger weekend crowds on the National Mall. However, according
to a couple of Baltimore hotel managers, bookings for conferences and
leisure stays were mixed. Additionally, a hotel contact in the Virginia
Beach area said that bookings were making “no great strides,” primarily
as a result of government travel cuts. Despite the lack of momentum in
government travel, most hoteliers said that they were able to raise
rates slightly. Looking ahead to late autumn, executives were optimistic
about bookings, as localities planned historical commemorations, music
programs, food festivals, marathons, and other social events. In South
Carolina, a hotel manager anticipated that a new carrier at a nearby
airport would provide solid bookings in the months ahead.

Agriculture

Widespread precipitation since our last report helped revitalize
crops and pastureland in many areas of the District. Rain in early
August aided late summer peaches in Maryland and West Virginia, and
soybeans were responding to improved weather conditions in Virginia.
Cotton and peanut growers in the District are also having a great year.
In South Carolina, the cantaloupe and watermelon harvest was virtually
complete by early August. Results of our recent agricultural credit
survey indicated that farmland values were above both the previous
quarter and year-ago levels.

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** MNI Washington Bureau: 202-371-2121 **

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