Looking forward, retailers expect strong sales growth to continue for the remainder of the year but they express some concern about the outlook for 1999 and beyond. Their uncertainty centers on possible fallout from turmoil in international financial markets and on domestic consumer response to recent stock market declines. Employment is reported to be holding steady on a same-store basis. Wages are reported to be increasing at a 3 to 6 percent rate. Most respondents report that competitive pressures are continuing to keep price inflation in check.
Most contacts say profit margins are holding steady.
Manufacturing Three-quarters of the First District manufacturers contacted indicate that recent business is up from a year ago. Most of these respondents cite percentage gains in the single digits, although orders for medical equipment are said to be rising strongly. Contacts report that business with General Motors has increased since the end of the strike but not as much as expected. Some equipment manufacturers cite other areas of recent softness, including computer circuitry and appliances. Overall, one-half of the manufacturers contacted expect some slippage in economic growth.