WASHINGTON — Last month's retail prices for women's apparel fell a seasonally adjusted 0.3 percent from September with a 1.3 percent drop in dresses and a 0.1 percent dip for suits and separates.
Price promotions to move fall merchandise during unseasonably warm weather do not seem to have played a significant role during the month.
"This October, the discounts were comparable to Octobers in the past," said Malinda Harrell, an economist at the Bureau of Labor Statistics, which released its Consumer Price Index on Thursday.
Against a year earlier, prices on women' apparel fell 2 percent in October, with dresses up 0.8 percent and suits and separates off 2.2 percent.
Thanks to relaxed trade policies on apparel spurring more imports from low-cost countries, particularly China, and stiff retail competition from the likes of H&M, Target and others, the pricing trend in apparel has been deflationary. Over the past five years, women's apparel prices are off 4.2 percent with prices on all apparel down 3.9 percent.
October was generally seen as a tough month for stores, with apparel and accessories retailers managing just a 0.1 percent rise in sales, compared with the preceding month, and department stores down 0.5 percent, according to a Commerce Department report Wednesday.
Economists and retailers are keeping a close eye on consumers, who are beset with a sluggish housing market, high gas prices and troubles on Wall Street.
Since consumer spending accounts for about two-thirds of the economy, the Federal Reserve is also keeping shoppers in mind as it sets interest policy, trying to keep rates high enough to avoid price inflation, but low enough to stimulate growth. Right now, the benchmark federal funds rate stands at 4.5 percent, down from 5.25 percent in early September.
Last week, Ben Bernanke, chairman of the Federal Reserve Board, said the weaker dollar and higher energy prices could push prices up.
Prices on all goods and services rose a seasonally adjusted 0.3 percent in October for the second straight month. The so-called core prices, which exclude food and energy goods, rose 0.2 percent for the fifth straight month.
"The 'low' 0.2 percent core reading implies further deceleration in the three-month annualized change," wrote Global Insight U.S. economist Kenneth Beauchemin in an analysis, adding that the retail price report would be encouraging for the Fed."With little to fear in the way of accelerating labor costs, the Fed will keep a watchful eye for signs of pass-through to consumer prices from surging oil prices and a depreciating dollar," he said. "So far, so good."
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