7th District - Chicago

Regional Federal Reserve Banks

Economic activity in the Seventh District was sluggish in June. Consumer spending was mixed and labor market conditions weakened some, although they continued to vary by location. Residential construction declined further and nonresidential construction showed signs of slowing. Manufacturing activity weakened slightly. Consumer lending declined, while business lending was stable. Cost pressures from rising material and energy prices remained high, while wage pressures continued to be low. View full report.

Business Spending

The demand for skilled labor remained strong and shortages of such workers continued to be reported.

Construction and Real Estate

The pace of construction slowed slightly from the previous reporting period.

Nonresidential development and construction showed signs of slowing. The rising cost of road building materials and tightening government budgets restricted the growth of infrastructure construction. Construction of retail outlets slowed further and several contacts expressed concern about overbuilding in the sector. The availability of financing for new commercial projects continued to tighten.

Manufacturing

Contacts reported continued weakness in the demand for residential construction equipment as well as some recent softening for nonresidential construction and agricultural equipment.

Prices and Costs

Costs remained high for a variety of inputs. Increases in commodity, food, and energy prices were again cited by contacts in various industries…. The rate of growth in steel prices flattened, but prices remained elevated.