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Retail Prices Decline 0.8% In November

WASHINGTON — With holiday discounting in high gear, retail prices for women’s apparel fell sharply in November against October, declining a seasonally adjusted 0.8 percent, the Labor Department reported Tuesday in its Consumer Price...

WASHINGTON — With holiday discounting in high gear, retail prices for women’s apparel fell sharply in November against October, declining a seasonally adjusted 0.8 percent, the Labor Department reported Tuesday in its Consumer Price Index.

This reversed a slight gain in October. Compared with November 2001, women’s apparel prices fell 1.8 percent, a continuation of year-over-year declines.

Meanwhile, all apparel retail prices for the month fell 0.4 percent against October and plunged 2 percent against year-ago levels. Girls’ retail apparel prices also fell 0.4 percent in November, but gained 2 percent against November 2001.

“The sales we are seeing are coming from discounters and you get softer price numbers as a result,” said Michael J. Donnelly, senior economist at Global Insight. “Discounters like Kohl’s are taking sales away from traditional department stores and, in response, they have to discount more, which makes it a vicious cycle in the apparel world.”

He said consumer prices are falling faster than domestic wholesale prices, which puts tension on profits.

“The response by retailers is exactly what we are seeing in the employment market and we expect to see continued layoffs because that’s the only way retailers can survive,” Donnelly said.

Charles McMillion, chief economist at MBG Information Services, said the numbers show “continuing price pressure from imports, weakening U.S. and global consumer demand growth, extensive unused capacity and strong productivity growth.”

He pointed to the Federal Reserve Board’s industrial production report, also released Tuesday, as an indicator of more job cuts and continued deflationary price pressure over the coming months.

In November, textile production fell 0.1 percent against October, marking the fourth consecutive monthly decline. Apparel production bounced back in November by 0.5 percent from a 2.1 percent drop in October.

In the overall economy, all consumer prices gained slightly by 0.1 percent in November after increasing 0.3 percent in October. Declining apparel and energy prices offset increases in medical care and food prices.

In the four categories tracked by the government, women’s outerwear prices fell 0.3 percent in November compared with October, and fell 0.4 percent against year-ago levels, while dress prices gained 1 percent last month and gained 3.5 percent year-over-year. Retail prices for suits and separates fell 3 percent against November 2001, while prices for underwear, nightwear, sportswear and accessories fell 2.4 percent against year-ago levels.