By  on September 19, 1994

WASHINGTON -- Women's retail apparel prices in August plunged a seasonally adjusted 2.6 percent against July, well below the 0.3 percent increase for all consumer goods and reflecting the continued pressure on retailers to keep prices down.

Compared to August 1993, according to Labor Department figures released last week, retail prices for women's apparel last month were down 3.5 percent, compared to a 2.9 percent increase for the whole Consumer Price Index.

"I don't think there is any doubt that retailers are trying to discount as deeply as they can," a Labor analyst said, noting the ability of larger stores to work better deals with their suppliers as a factor in helping to keep prices lower. Typically, apparel prices in August increase as stores introduce fall and winter apparel.

Last August, women's apparel prices were up 1.5 percent against July.

"It is the larger companies with more clout that can really resist price increases," said Rosalind Wells, senior economist with Management Horizons, the retail consulting division of Price Waterhouse, LLP, New York.

"It's classic economics here," she said. "The women's market is much weaker than men's, which means you can't increase prices."

For all apparel, retail prices in August declined 1.1 percent and were down 0.9 percent since August 1993. Men's apparel prices were up 0.5 percent for the month and increased 0.2 percent over the year. Girls' apparel prices at retail dropped 3.8 percent for the month and were down 2.8 percent over the 12 months. The Labor Department attributed the 1.1 percent monthly decline in all apparel prices as helping to temper the overall CPI, considered the most reliable indicator of inflation.

August is the third consecutive month retail prices have advanced 0.3 percent, indicating to economists that inflation remains moderate.

The report "should spell relief for the Federal Reserve and financial markets who seem to believe that inflation is on the verge of boiling over," said Robert Barr, the U.S. Chamber of Commerce deputy chief economist. "While we've had a slight acceleration in consumer prices in the last few months, this should be countered by the slower economic growth expected in the second half of the year."

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