Dallas San Francisco Full report The Second District's economy continued to grow briskly since the last report. Both retail selling prices and merchandise costs were little changed, though sizable price reductions are anticipated in early 1999. Retailers report labor shortages but not significant wage pressures. Regional purchasing managers report that manufacturing activity continued to grow at a steady pace in June, while input prices continued to edge down. Finally, local banks report further declines in consumer delinquency rates and continued moderate growth in loan demand.
Most contacts note continued firm demand for home durables.
All contacts say that inventories were at desired levels at mid-year. One large retailer notes that shipping bottlenecks from West coast ports prompted them to stock up on imported merchandise for the year-end holiday season earlier than usual. Retail selling prices and merchandise costs were reported to be steady, on balance, with cheaper Asian imports offset by higher prices for toiletries and certain other items. Most retailers say that the Asian crisis has had only a modest impact on the costs and prices of merchandise currently on the shelf mainly apparel, electronics and appliances as well as merchandise for the upcoming Christmas season. Construction and Real Estate Housing markets in New York and New Jersey gained momentum across the board in the second quarter.