A side effect of the continued downturn in housing was low financial activity. Loan volumes were flat or lower in most districts, as consumer loan demand dropped in several areas. Credit was tight, but banks said that high-qualified borrowers were a hot commodity, leading to strong competition for them. Historically low interest rates have spurred increased mortgage refinancing in several other locations.
With the unemployment rate still lingering above 9 percent, the Fed's take did not show any major changes over the horizon. Hiring was flat in most districts, as several said there was "only limited and selective" demand for new workers. Reduced expectations for the future, coupled with continuing uncertainty about the fate of the economy, is keeping businesses from taking on new workers.
In New York, continued struggles in the finance industry has reduced hiring, and could lead to some layoffs in the coming months. While the city did expect an increase in seasonal hiring with the holiday season approaching, Chicago and Richmond were lowering those same expectations. Wage pressures remained subdued in most regions.