By exception, however, respondents in the discount retail sector report sales below last year, while a graphic supply firm indicates sales growth slowed in the last month. Most respondents report steady employment levels, although a lumber yard and contacts in the tourist industry are seeing employment levels erode because job leavers are running ahead of new hires. All contacts say that hiring is increasingly difficult because of very tight labor market conditions. Most merchants continue to report wage increases in the 3 to 5 percent range. However, in the tourist industry, wage offers to seasonal help are said to be running 20 to 30 percent above normal levels.
Most respondents say retail prices are generally holding steady.
By exception, one sector is raising prices less than 4 percent and hotel room rates are increasing at a 5 to 7 percent pace. Profit margins are said to be holding steady, with non-labor cost efficiencies offsetting wage inflation. Merchants contacted this time plan only modest expansions of operations over the next few months. Respondents expect relatively strong economic growth to continue through the remainder of 2000. Construction material suppliers, for example, report that building contractors do not expect interest rate hikes to affect their businesses until late in the year.