Wholesale prices on U.S.-made women's and girls' apparel fell a seasonally adjusted 0.2 percent last month, even as a spike in energy costs pushed up prices 0.9 percent on all domestic goods, more than the 0.6 percent economists predicted.
WASHINGTON — Wholesale prices on U.S.-made women's and girls' apparel fell a seasonally adjusted 0.2 percent last month, even as a spike in energy costs pushed up prices 0.9 percent on all domestic goods, more than the 0.6 percent economists predicted.
The so-called core prices in the Labor Department's Producer Price Index, which excludes food and energy goods, increased 0.2 percent compared with April and were in line with predictions after two months of flat growth.
"The report on May producer prices, coupled with the apparent moderation in core consumer inflation under way, underscores the ability and willingness for producers to absorb temporary, albeit dramatic, swings in relative energy prices into profit margins,"Global Insight U.S. Economist Kenneth Beauchemin wrote in an analysis.
Economists will get a look at how energy and other costs are filtering down to shoppers when the Labor Department releases the Consumer Price Index today. Wall Street watches closely for signs of inflation because, if prices rise too quickly, the Federal Reserve Board might increase the benchmark federal funds interest rate, currently at 5.25 percent, curbing growth by making it more expensive to borrow money.
Since the vast majority of apparel sold in the U.S. is made abroad, the PPI offers a window on the small, but hardy band of apparel factories remaining in the U.S.
U.S. apparel factories, pushed and pulled by consolidation among retailers and higher energy costs, as well as intense competition from factories in low-cost countries such as China, increased prices on women's and girls' items by 0.7 percent last month compared with a year ago.
Within the category, knit shirt prices rose 4 percent last month, as swimwear prices shot up 10.4 percent. Goods with lower wholesale prices included dresses, down 2 percent, and underwear, 2.4 percent below a year ago.
On the textile front, prices on synthetic fibers fell 0.1 percent for the month, as greige fabrics slid 0.7 percent and finished fabrics were off 0.1 percent. Yarn prices increased 1.7 percent.
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