Labor markets remained very tight, with wage pressures still evident but no higher than in previous surveys. Retail prices were unchanged, while prices for some construction and manufacturing materials continued to rise. Following a weak autumn, retail activity during December was very strong. Nearly all stores reported higher sales than a year ago, as the holiday shopping season got off to a roaring start and stayed strong through Christmas. Most respondents reported no adverse effect on their holiday sales from on-line retailers, and a few said they had success with their own web sites.
Managers generally expect solid retail activity to continue into the spring.
Some stores began trimming inventories immediately after the holidays, yet most were satisfied with current stock levels. Retailers reported some increase in demand for precautionary items such as bottled water and batteries as Y2K approached, but most stores said they had planned for this phenomenon and therefore experienced few inventory problems. Motor vehicle sales in December were generally stable, with sales in most parts of the district higher than a year ago. While car dealers expect slower sales in coming months due to typical seasonal factors, most were satisfied with current inventory levels. Manufacturing District factory activity slowed after showing signs of improvement in recent months.