Apparel Prices Higher in Sept., Led by Suits and Separates
Retailers benefited from some increased pricing power last month, especially in women's clothing, which drove overall apparel prices up a seasonally adjusted 0.6 percent, the largest September boost since 1990.
WASHINGTON — Retailers benefited from some increased pricing power last month, especially in women's clothing, which drove overall apparel prices up a seasonally adjusted 0.6 percent, the largest September boost since 1990.
Women's prices rose 1 percent compared with August, propelled by suits and separates, which registered a 2.3 percent advance, according to the Labor Department Consumer Price Index released Wednesday. Outerwear prices jumped 3.4 percent over the month, while dresses slid 2.1 percent.
Comparing September with a year earlier, women's apparel prices were up 2.9 percent, with suits and separates rising 5.6 percent.
Retail consolidation, such as Federated Department Stores' acquisition of the May Department Store Co., may have contributed to the shift, though stores also seem to be holding the pricing line by better control of inventory. Lower inventories can mean less discounting to clear excess merchandise, better profit margins and higher prices.
"Retailers really have caught this religion of reducing risk by reducing inventory," said Eric Beder, analyst and senior vice president at Brean Murray, Carret & Co. "Especially if the product is fashion right, you put all that together and you get premium pricing. Look at [stores] like Macy's, they want to raise the fashion level so they can raise the pricing. Look at J.C. Penney, which wants exclusive products so they can generate higher pricing control."
Overall U.S. consumer prices declined 0.5 percent, the steepest drop since last November, reflecting lower energy costs, after a 0.2 percent increase in August.
"Falling gasoline prices allow real wages to rise and consumers desperately needed some relief," said Charles McMillion, president and chief economist at MBG Information Services. "There are two areas where the relief is most important — one is they needed their wages to rise and that happened in September and if gas prices stay down, it may continue to happen, at least modestly."
Excluding the volatile food and energy sectors, the so-called core CPI inched up 0.2 percent. Year-over-year, core prices were up 2.9 percent last month, though economists generally expect a slowing economy to keep inflation in check.
"I'm more worried about a recession right now than inflation," said David Wyss, chief economist at Standard & Poor's. "If everything goes OK, it's not a problem. But there are a lot of things that can go wrong."
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