Consumer durables are generally the sector hardest hit, with television sets and large appliances moving very slowly. Both New York and Minneapolis mention retarded sales of newer clothing fashions, while St. Louis and Boston indicate that the shoe industry is facing declining sales. Several Districts report that consumers are switching to lower quality merchandise in response to rising prices. The lower sales in some lines were apparently offset by a continued uptrend in sales of food and a few other products, such as steel, domestic oil, and automobiles. Most Reserve Banks report that although labor markets are relatively weak, unions have won major wage increases.
Unemployment appears to be rising slowly.
Most reductions in labor usage are taking place through normal attrition, unpaid vacations, and shorter workweeks. Some of the unemployment, however, has resulted from plant closings and layoffs. In Richmond, skilled labor is reported in short supply. Unemployment of skilled workers is reported by both Boston and Chicago. Rising prices, expectations of higher prices, and wage costs continue to plague most business respondents despite the weaker labor market.