San Francisco Full report Economic growth continues in the First District although, as noted in the June report, the pace of expansion appears to be slowing somewhat from earlier in the year. A majority of the New England retailers contacted in July report sales growth at or above expectations in recent months.
Labor markets remain tight.
While both manufacturers and retailers say selected input costs are rising, they are passing very little on to customers, largely because of offsetting cost savings. Retail Retail contacts in the First District say that sales continue to grow, although they are seeing some evidence of a slowdown. Sales growth was at or above expectations in the building materials, household furniture, and office supply sectors, but below expectations for contacts selling hardware and apparel. Respondents say that inventories are at desired levels and head counts are mostly holding steady. Labor shortages have reportedly become somewhat more severe, with contacts increasingly resorting to wage increases in order to retain critical help.