By  on September 16, 2005

WASHINGTON — Retail prices on women's apparel held steady in August, after adjusting for seasonal variations, according to the Labor Department's Consumer Price Index released Thursday.

However, the deflationary trend, which has wreaked havoc on retail and vendor bottom lines, could still be seen in the 2.4 percent price drop from a year earlier.

"[Retailers] post these prices in August and maybe in September, and by October they're cutting 10, 20, 30 percent off the price tags," said Ken Goldstein, an economist at The Conference Board. "I don't expect there to be any change in that pattern."

Complicating the picture for retailers, sales have been sluggish. Sales at apparel and accessories stores showed no improvement in August and remained unchanged at $16.65 billion.

"The conundrum in terms of what retailers are facing is that prices are down, [consumer] income is up and yet sales are not really moving," said Goldstein. "There's not light at the end of the tunnel."

Even at lower year-over-year prices, apparel faces stiff competition in family budgets. High energy costs, which helped drive prices on all goods up 0.5 percent in August, continued to drain discretionary dollars from the consumers' pocketbook.

This drain can be seen clearest in the price of gasoline. A gallon of regular averaged $2.92 Thursday, up from $1.84 a year ago, although down from a high of $3.06 on Sept. 5, according to the American Automobile Association.

Factoring out food and energy goods, inflation was contained, with overall prices inching up 0.1 percent for the month.

Prices on all apparel rose 1 percent in August, but fell 0.6 percent against a year earlier. In the women's area, outerwear prices advanced 4.9 percent for the month, but were down 4.6 percent year-over-year, while dress prices slid 1.9 percent in August and were down 0.3 percent against a year earlier.

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