By  on November 16, 2005

WASHINGTON — Continuing to battle increasing imports, domestic apparel producers cut wholesale prices on women's and girls' apparel 0.7 percent in October, a 0.4 percent drop from a year ago, according to the Labor Department's Producer Price Index released Tuesday.

The PPI also showed that inflation in the broader economy seems to be in check, as high energy prices have, for the most part, not seeped into other areas. The Consumer Price Index, which offers another key reading on inflation, will be released today.

Seasonally adjusted prices on all finished goods rose 0.7 percent in October, but were down 0.3 percent after stripping out the volatile food and energy sectors. Energy prices swelled 4.1 percent during the month.

"For a time in which energy prices have been rising very sharply, the surprise is that we're not seeing broad-based increases elsewhere," said James Glassman, an economist at J.P. Morgan Chase. "You're not really looking at an inflation story. Beyond the energy area, we still have a very competitive landscape and I think it's because we're living in a global world."

Through September, apparel and textile imports have increased 8.5 percent to 38.33 billion square meter equivalents, worth $67.72 billion. Countries such as China and India that have large pools of low-cost labor are gearing up production and putting the squeeze on U.S. producers.

"You're just seeing this continued pressure of foreign competition," said David Wyss, Standard & Poor's chief economist. "It's darn hard to get any kind of a price increase through."

Wholesale prices on all domestically produced apparel dropped 0.4 percent during October and were 0.5 percent below year-ago levels.

The most dramatic drop in the women's and girls' area came in nightwear, where prices declined 7.1 percent last month and 6.8 percent against a year ago.

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