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Wholesale Prices Dip 0.3%

The textile area generally had price increases for January; greige fabrics rose 4.5 percent, yarns were up 1.7 percent and synthetic fibers were ahead 4.8 percent.

WASHINGTON — Wholesale prices on domestically produced women’s and girls’ apparel slipped 0.3 percent in January compared with a year ago, according to the Labor Department’s Producer Price Index.

Prices on all U.S.-made goods increased a seasonally adjusted 0.3 percent last month, compared with December. Excepting food and energy, the so-called core rate rose 0.4 percent, twice the 0.2 percent expected by economists.

The PPI offers a first read on inflation and is not as influential as the Consumer Price Index, which comes out Wednesday and tracks what shoppers are actually paying in stores. Since two-thirds of the U.S. economy is tied to consumer spending, price changes can wildly influence the rate of growth. The PPI doesn’t take into account price fluctuations on imported apparel, which makes up the bulk of clothes sold at retail.

Hints of gathering inflation might encourage the Federal Reserve, now led by chairman Ben Bernanke, to continue raising interest rates, which could have a cooling effect on the economy.

“Monthly producer price movements are erratic and the increase in core inflation follows five months of near-zero inflation,” said Peter Morici, professor at the University of Maryland’s Robert H. Smith School of Business. “Further pushing up interest rates risks slowing growth too much, raising unemployment and torpedoing the recent modest improvement in inflation-adjusted wages.”

In the women’s and girls’ category, prices of jeans and slacks slid 2 percent against January 2005, while knit shirts and blouses rose 3.2 percent and underwear prices advanced 5.7 percent.

The textile area generally had price increases for January; greige fabrics rose 4.5 percent, yarns were up 1.7 percent and synthetic fibers were ahead 4.8 percent.

The broader trends, though, don’t always hold for individual suppliers.

Increased yarn prices, whether on product from the U.S. or producers in Italy and Pakistan, have helped or forced sweater firm 525 America to keep its prices up as the business continues to expand. About one-quarter of the firm’s production is in New York City.

“Sales at retail and wholesale from domestic suppliers have gotten better for the last year-and-a-half,” said Robert Bock, 525 America’s president.

Goods made in the company’s New York knitting mill wholesale for an average of $35.

This story first appeared in the February 21, 2006 issue of WWD.  Subscribe Today.

“Domestically, business isn’t bad and prices have been going up,” he added.

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(Ending Feb. 17)
Gainers
Decliners
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1.19
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37.35
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