NEW YORK -- While more or less upbeat about business next year, most ready-to-wear executives said the impact of the new Republican Congress on the overall business climate was still unknown.

Some said as interest rates rose, consumers would spend more on apparel and less on big-ticket items. Others said the quality and look of their products had more to do with sales than rising interest rates.

But, as Tom Murry, president of Tahari Ltd., put it, "Consumers' perceptions of the economy is more significant than the actual economy.

"There's a lot of talk about things like a cut in capital gains, and whether it actually happens remains to be seen," he said. "But if the consumer perceives she has more discretionary income -- whether she does or not -- she'll spend more.

"Interest rates will have a big impact," he added. "[Adjustable rate mortgages] and auto loans are all going up, and that will put a squeeze on discretionary income."

Conversely, R. Fulton Macdonald, president of International Business Development, a consulting firm, said the new Congress should have a positive impact.

"Republicans are committed to reducing taxes, and that will put more money in the hands of consumers," he said.

The overall economy is coming on strong, said Howard Bloom, president of Chetta B, but he was confused as to why the Federal Reserve Bank was rushing to raise interest rates and curb the growth of the economy. "I'm not scared of a little inflation, especially when you consider the alternative, which is less spending and more unemployment," Bloom said. "You really have to wonder why they're putting the breaks on the economy just as it's chugging along."

Jules Wachter, president of PSI/Bicci, said the Republican Congress would be good for the economy, and was expected "to give big business a break."

"That," he added, "will allow us to expand our business, too."

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