Residential real estate markets are doing well. Retail and Tourism Most retail contacts report that sales are growing at a healthy pace, with the growth rate higher now than in the second half of 1997. This unexpected strength in sales is not causing upward revisions of 1998 growth projections, already strong at 4 to 7 percent. Faster-growing sectors are office and graphics supplies, tourism, consumer electronics, home furnishings, building materials, and health and beauty aids. Areas of weakness are hardware, automotive parts, and apparel.
Employment is said to be either increasing moderately or holding steady.
Half the contacts report tightness in labor markets and corresponding difficulty finding, attracting, and retaining employees. In most sectors, wage growth has picked up somewhat and is now running at a 4 to 6 percent annual rate. By contrast, in sectors growing only moderately, wages are said to be increasing only 2 to 3 percent. With one exception, respondents say that prices are holding steady. The exception is tourism, where a continuing shortage of hotel rooms in the Boston area is causing room rates to rise.