WASHINGTON — Retail apparel prices rose a seasonally adjusted 0.5 percent in March compared with February, as retailers tried to regain pricing power in the face of rising gas prices, the Labor Department’s Consumer Price Index showed Friday.
The March gain followed a 0.9 percent decline in February.
The greatest inflationary pressure came in the boys’ apparel category, which saw prices rise 6.2 percent in the month and increase 10.4 percent over March 2011. Women’s apparel prices increased 0.3 percent in March, while men’s apparel prices declined 0.2 percent, with declines in every category of male apparel. Girls’ apparel prices increased 0.5 percent.
On a year-over-year basis, all apparel retail prices were 4.9 percent higher than in March 2011, as women’s apparel prices increased 4.9 percent and men’s apparel prices rose 5.1 percent. Girls’ prices were 8.9 percent above a year earlier.
The overall Consumer Price Index edged up 0.3 percent in March. Excluding volatile food and energy prices, core retail prices rose 0.2 percent in March compared with February.
“I was a bit surprised by the apparel numbers,” said Jeet Dutta, senior economist at Moody’s Analytics. “They retracted [in February] quite a bit, and some of that was regained in March.”
Dutta said the price increases within the apparel categories were “isolated,” driven primarily by spikes in girls’ and boys’ prices and some women’s categories despite the across-the-board retreat in men’s wear.
Within the women’s category, the biggest hike came in one of the hotter fashion categories, dresses, which rose a seasonally adjusted 8.8 percent in March compared with February and were 15.3 percent above prices in March 2011. But in women’s outerwear, a tough sell over the winter, prices fell 3.4 percent last month, and prices on suits and separates fell 1.5 percent.
Including in the universal declines in men’s wear, prices on shirts and sweaters fell 0.8 percent last month but were 4.8 percent above year-earlier prices, while retail prices on furnishings fell 0.5 percent in the month and were 5.5 percent above March 2011. Prices on suits, sport coats and outerwear fell 0.4 percent but were 5.1 percent higher year-over-year, and prices on pants and shorts declined 0.1 percent last month but were still 6.2 percent above a year earlier.
Dutta said retailers have maintained some pricing power even in the face of rising gasoline prices, because consumers have been resilient about the “pain at the pump” thus far.
“If you look at overall spending and consumer confidence, the levels are slipping a little, but they are holding up a whole lot better than one might have expected, considering how gasoline prices have risen,” Dutta said. “One reason could be that consumers have already made the adjustment to living with higher gas prices….It is in light of the strength and resilience in consumer spending that we are seeing some pricing power retained by retailers.”
Chris G. Christopher Jr., senior principal economist at IHS Global Insight, offered a different perspective on retailers, noting he doesn’t believe merchants have much pricing power.
“Consumers are not in the greatest shape….Confidence is still at depressed levels, and rising gasoline prices are putting a crimp on people,” Christopher said. “It is really hard to charge premium prices. Retailers are being squeezed, and consumers are being squeezed.”
Christopher attributed the rise in retail apparel prices in March to pent-up demand, built up during the unseasonably warm weather, which he said was released when retailers introduced their spring merchandise lines. He cited the International Council of Shopping Centers’ recent retail chain store sales report, which showed clothing stores did “very well.”
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)