In the service sector, growth remained healthy, even though the overall pace was held back by a reduction in utilities' sales. Shortages of both skilled and entry-level workers worsened, and reports of higher wages were more widespread. Prices, especially in the service sector, increased at a somewhat faster rate. Retail Since the beginning of the year, the retail sector has hardly missed a beat. January sales held up better than in past years, and most merchants told us they were pleasantly surprised by the strength of consumer spending in February.
Mild temperatures hurt winter apparel sales, but got spring clothing off to a fast start.
Consumers' purchases of durable goods strengthened. Sales of both new and used automobiles exceeded dealers' expectations, and furniture retailers reported that their businesses were finally benefiting from buoyant housing markets. While maintaining sales growth remained a priority, many merchants told us that their biggest concern was finding and retaining workers. Reports of wage increases were more prominent than in our last report. Retailers indicated that prices generally increased at a faster rate in recent weeks.