By  on July 15, 2005

WASHINGTON — Women's retail prices continued its roller-coaster ride in June, falling a seasonally adjusted 0.3 percent for the month and sliding 1.9 percent against a year ago, according to the Labor Department's Consumer Price Index released Thursday.

Prices on women's apparel have fluctuated this year, rising in January, falling in February, increasing in March, declining in April, holding steady in May and falling again last month. For the year to date, women's apparel prices are up 0.4 percent.

Overall apparel prices fell 0.7 percent in June, marking the largest one-month drop since March 2003, according to Nicole Shepler, senior economist at the Labor Department.

Shepler said the sectors that contributed to the record drop in June were women's outerwear, which fell 1.1 percent; girls' apparel, which declined 2.1 percent, and women's footwear, which fell 2.2 percent. The Labor Department also reported that outerwear prices fell 4.1 percent against a year ago, while prices for dresses dipped 0.8 percent last month but rose 4.5 percent compared with June 2004. Retail prices for suits and separates were flat last month but fell 4 percent against a year ago, while prices for the combined category of underwear, nightwear, sportswear and accessories dipped 0.2 percent in June and inched up 0.5 percent in the 12 months.

"It is hard to go back and find a time with apparel prices in general when you haven't seen at least a small year-over-year decline and that is driven by imports," said Carl Steidtmann, chief economist at Deloitte Research. "You may be seeing apparel retailers maintain margins with lower prices simply because the cost of doing business is going down."

Ken Goldstein, an economist at the Conference Board, pointed to the increase in retail sales at clothing and accessories stores, which rose 1 percent in June to $16.78 billion. (See story, page 14.)

Goldstein said strengthening retail sales and higher cumulative prices will allow retailers to put higher price tags on back-to-school merchandise and "not worry too much about the stuff that remains on the racks."

In the overall economy, retail prices remained unchanged in June after dipping 0.1 percent in May due to weakening energy prices that have bounced back.Stripping out volatile food and energy prices, the core rate rose 0.1 percent in June, dampening inflation fears for the time being.

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