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Apparel Prices Up 1.8% in August

WASHINGTON — After four months of declines, retail prices for women’s apparel bounced back in August, increasing a seasonally adjusted 1.8 percent against July, the Labor Department reported Wednesday in its Consumer Price...

WASHINGTON — After four months of declines, retail prices for women’s apparel bounced back in August, increasing a seasonally adjusted 1.8 percent against July, the Labor Department reported Wednesday in its Consumer Price Index.

However, compared with August 2001, women’s apparel prices last month decreased 1.4 percent, a continuation of their months-long deflationary pattern.

Carl Steidtmann, chief economist with Deloitte Research, pegged the one-month gain in women’s apparel prices to the early introduction of full-priced fall apparel. However, he doesn’t expect the pricing strength to continue, since overcapacity of inexpensive foreign-made apparel in the supply chains persists and competition from discount retailers continues to be fierce.

“It’s just a one-month thing,” Steidtmann said. “Prices are still down from a year ago and all the other deflationary factors are still in place.”

However, Frank Badillo, senior retail economist with Retail Forward Inc., said the price report holds out some promise that apparel prices could be strengthening, since most goods at retail also posted price gains.

“It makes you wonder whether apparel and other goods are pulling out of the deflationary spiral,” he said.

Meanwhile, all apparel prices for the month increased 1.1 percent and were down 1.7 percent from year-ago levels. Girls’ retail apparel prices gained 2.8 percent in August against July and were up 1.7 percent from August 2001. In the overall economy, prices for all retail goods edged up 0.3 percent in August, the largest gain since April, when the index rose 0.5 percent.

Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University, said the increase in consumer prices overall doesn’t portend a surge in inflation. Rather, he said the increase is “heartening,” since it shows the economy still has a pulse because retailers can increase prices a bit.

In the five categories of women’s apparel tracked by the government, dress prices increased 7.8 percent in August against July and climbed 15 percent from year-ago levels; outerwear prices increased 6.3 percent for the month, but fell 2 percent over the year; suits and separate prices increased 3.5 percent for the month and declined 2.5 percent from August 2001, and underwear, nightwear, sportswear and accessory prices posted a monthly dip of 1.5 percent and a yearly decline of 6.6 percent.

This story first appeared in the September 19, 2002 issue of WWD.  Subscribe Today.