An upscale retailer blamed stock market uncertainty, in part, for the decrease in sales. Inventories are generally at desired levels. Base employment is said to be holding steady and increasing only with store expansion. Most retailers hope to hire the normal range of workers for the holiday season, but expect to experience difficulty in recruiting. Many contacts report wage growth in the 5 to 8 percent range, an increase from earlier in the year, as they attempt to retain valued help in a tight labor market.
Most respondents say prices and gross margins are holding steady.
Only a few retail respondents plan to expand operations. Looking forward, most retail contacts express optimism about the final quarter of 1998, but they are more pessimistic regarding 1999 and beyond. Half of the contacts say they expect a recession within the next 12 to 18 months, while the other half expect a slowdown in growth. Manufacturing About one-half of the First District manufacturers contacted indicate that recent business is up from a year ago. Segments with sales growth include biotech products, printed matter and paper goods, and office equipment.