WASHINGTON — Maybe it’s because more young men are wearing suits and ties these days.
Whatever the reason, men’s apparel retail prices rose 0.8 percent in July, driven by higher prices for men’s furnishings such as ties, as well as for shirts and sweaters. Furnishings prices increased 1.7 percent last month, while prices for shirts and sweaters rose 1.2 percent, according to the Labor Department’s Consumer Price Index released Tuesday.
Men’s wear helped drive up overall consumer prices for apparel by a seasonally adjusted 0.2 percent in July, even though prices for women’s apparel fell 1.3 percent. There was also pricing strength in girls’ apparel, which rose 0.5 percent but boys’ apparel prices declined 0.7 percent.
In the men’s category, prices for pants and shorts increased 0.2 percent, while prices for the combined category of suits, sport coats and outerwear fell 2.1 percent.
Retail prices in the women’s category dropped across the board in July. Outerwear prices dropped 4.6 percent, while dress prices declined 1.8 percent. Prices for the combined category that includes underwear, nightwear, sportswear and accessories dropped 1.1 percent, and prices for suits and separates fell 0.9 percent.
“There does seem to be some sustained pricing power in the overall apparel category,” said Jeet Dutta, senior economist at Moody’s Analytics. “This was the third straight month of fairly substantial apparel price increases and it outpaced the overall CPI.”
Dutta said the apparel retail pricing performance was “surprising” in comparison to other retail categories, which have been weak.
“It does appear many retailers, as they shift from summer goods to back-to-school items, have had a fair amount of discounting and promotional activity going on,” Dutta said. “For the overall apparel price category to escape that and sustain three months of price increases is very impressive.”
He said men’s apparel prices appeared to be more resilient to discounting than women’s apparel prices in July, which were down across the board, but women’s apparel prices were much stronger than men’s on an annual basis.
Dutta said he expects b-t-s sales to pick up in August, although he does not expect it will generate “a whole lot of pricing power,” due to continued summer discounting.
“Job growth has been quite decent so going into the end of summer and early fall, we do expect sales to pick up a little from where we are now,” he said.
The overall CPI rose 0.1 percent in July, while the core index, which excludes the volatile food and energy prices, also inched up 0.1 percent.
Chris G. Christopher, Jr., director of consumer economics at IHS Global Insight, said the overall rise of 0.1 percent in consumer prices was the weakest increase since February, due to a decline in energy prices across the board, which was good news for consumers.
However he sounded a note of caution about rising food prices, which rose 0.4 percent in July.
“Overall, the consumer inflation story is relatively mild. However, the direction of food prices is somewhat worrisome,” Christopher said. “Lower- and middle-income households are likely to be paying a larger percentage of their paychecks for grocery bills.
“Paycheck-cycle economics has become more relevant for retailers since median household income adjusted for inflation is currently 8.4 percent below 2007 levels and approximately 15 percent of the American population lives below the poverty line,” Christopher said.
Dutta said he does not expect the rise in food prices in July to have an immediate impact on consumer spending.
“This month’s increase will have a limited effect on other purchases in my opinion unless we see food prices accelerate at an even faster clip akin to what we saw in 2011, when food prices were rising in excess of 3 percent and even approaching 4 percent at an annualized rate,” Dutta said. “If it gets to that state, then we could see a cutback in other areas.”
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