Retail trade employment has been sluggish, particularly in general merchandising and apparel stores, both of which had lower employment in December 1997 than a year earlier . Incomes continued to grow robustly. To the extent that such wage increases exceed the sum of productivity growth and the growth in hours worked, neither of which are measured at the state level, they contribute to inflationary pressures. Inflation has been surprisingly low given the length of the economic expansion. Presumably, high growth in productivity, low growth in non-wage employment benefits, and the strong dollar have restrained price increases.
Housing markets remain in good shape, and without signs of speculative pressures.
Sales have been brisk, with prices rising moderately. Permits for new housing averaged 1500 per month in the year ending in November 1997, versus 1400 per month in the prior year. Permits have been in the 1200-1600 range for several years, less than half the rate of the speculative boom at the end of the 1980s. The slowdown in the growth of consumer spending in 1997 does not reflect any deterioration in consumer confidence. Mass Insight's consumer confidence index for Massachusetts, patterned after the Conference Board's index, was 126 for October 1997, the highest recorded value since the quarterly survey began in 1991.