WASHINGTON — Stoking inflation fears, retail prices for women’s apparel jumped a seasonally adjusted 1.8 percent in March and were up 0.4 percent from a year ago.
The U.S. Department of Labor said in its monthly Consumer Price Index released Wednesday that all apparel prices rebounded in March and rose 0.8 percent, although they were flat compared with a year ago. Girls’ apparel prices jumped 3.5 percent in March, but were down 4.2 percent against March 2004.
In the overall economy, retail prices — a closely watched measure of inflation — rose 0.6 percent in March, the biggest increase in five months. They were driven primarily by higher energy and apparel prices. Excluding volatile food and energy prices, the core index in March was up 0.4 percent, the largest increase in two-and-a-half years. This followed a 0.4 percent boost in February and left consumer inflation rising at an annual rate of 4.3 percent in the first three months of this year, which economists said might lead to new interest rate boosts by the Federal Reserve to curb inflation. Retail prices rose 3.3 percent overall last year.
The Fed’s Beige Book report released Wednesday, an anecdotal economic snapshot of 12 districts across the U.S., cited increased energy costs as a threat to consumer spending, although it showed that the economy continued to pick up from late February through early April.
The apparel price increase was “surprising,” said Carl Steidtmann, chief economist at Deloitte Research.
“There are a couple of factors with the apparel prices, including a snapback from declines seen in the earlier part of the year,” Steidtmann said. “The other part could be that a lot of retailers brought in spring merchandise earlier than usual and were able to sell it at fuller markup than what they traditionally were able to do.”
Charles McMillion, president and chief economist at MBG Information Services, said the report “indicates price volatility in previous months, suggesting changes in seasonal pricing patterns.”
McMillion also noted apparel producers and retailers appear to be trying to pass along higher energy costs.
Among the categories of women’s apparel tracked by the Labor Department, women’s outerwear prices declined 3.6 percent in March and on a year-over-year basis, while prices for dresses rose 3.1 percent in the month, but fell 1.1 percent against a year ago.Retail prices for suits and separates increased 1.1 percent last month, but declined 1.3 percent against a year ago, while prices for underwear, nightwear, sportswear and accessories jumped 4 percent in the month and gained sharply by 6.3 percent for the year.
The Beige Book noted that rising oil costs affect areas from petroleum-derivative products such as polyester and plastic to the cost of shipping, and are contributing to a runup in wholesale prices. At the same time, higher gasoline prices are eating into Americans’ disposable income, reducing their buying power.
More than half of the 12 districts in the survey reported an increase in retail activity, with Kansas City and San Francisco reporting “solid” sales increases, while merchants in Dallas were “disappointed” with their performance.
The report noted the New York economy has been buoyed by a rise in tourism. “Two major Manhattan department stores report that brisk tourism has buoyed their sales,” the study said, without naming the stores.
In Philadelphia, the report added, “stores that specialize in luxury goods continued to post better year-over-year sales gains than stores selling less-expensive merchandise.”
Retailers in Atlanta, Chicago and Kansas City cited apparel as among the better-performing categories for the month. Despite the uneven results for the month, the report noted that most retailers are still expecting a solid year overall.
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