WASHINGTON — Wholesale prices on U.S.-made women's and girls' apparel fell a seasonally adjusted 0.1 percent in October as lower energy costs pushed down prices for all goods by 1.6 percent, the biggest recorded drop in the Labor Department's Producer Price Index.
After a tepid start, Wall Street staged an afternoon rally, with the Dow reaching an all-time high and closing at a record 12,218. The S&P 500 closed at 1,393, its highest level since November 2000.
Compared with a year ago, wholesale prices on women's and girls' apparel fell 0.3 percent last month, with underwear prices declining 3.6 percent and certain types of outerwear and sweaters falling 3.3 percent. Nightwear was up 4.1 percent, and woven shirts and blouses, up 2 percent.
Economists said they viewed the overall price decline — excluding food and energy goods, the so-called core prices dipped 0.9 percent — as a sign that inflation should not be an immediate concern. In addition, an overall sluggish retail sales report from the Commerce Department Tuesday (see related story, this page) suggested that the economy was slowing and inflation pressures were easing.
"Retail sales and wholesale price data released today indicate the economy is headed for a soft landing," Peter Morici, professor at the University of Maryland's Robert H. Smith School of Business, said in a report. "Economic growth is moderating and inflation appears to be subsiding."
In August, the Federal Reserve Board halted a two-year campaign against inflation in which the benchmark federal funds rate rose to 5.25 percent after 17 consecutive increases. Kenneth Beauchemin, U.S. economist at Global Insight, said the next move for interest rates might be down.
"The likelihood of 2007 fed funds rate cuts will rise with today's announcement and will focus attention on the consumer prices report due out later this week for signs of an echo of today's news," Beauchemin said in a report.
The Consumer Price Index, which tracks retail prices on all goods, including imports, is due out Thursday.
On the textile front, wholesale prices on synthetic fibers rose 0.6 percent for the month, as yarns increased 1.7 percent, greige fabrics were up 3.4 percent and finished fabrics increased 2.4 percent.
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