By  on February 20, 2009

WASHINGTON — Rebounding from steep discounts at the end of last year, retail prices for apparel rose a seasonally adjusted 0.3 percent in January, the Labor Department said Friday in its Consumer Price Index.

But deflation risks remain and retail apparel prices last month fell 0.9 percent compared with a year earlier.

Women’s apparel prices rose 0.5 percent in January and dropped 3.6 percent year-to-year. Men’s apparel prices increased 1.9 percent for the month and 0.4 percent for the year.

Prices for all goods and services advanced 0.3 percent in January, following three months of steeply falling prices. It is the first increase since July and was mostly driven by higher gas prices, economists said. Compared with last year, overall prices were flat. Core inflation, which excludes the volatile energy and food sectors, rose 0.2 percent in January and advanced 1.7 percent year-over-year.

“The price rises may allay deflation fears temporarily, but they probably reflect a temporary bounce at the start of the year after severe discounting during the holiday season,” said Nigel Gault, chief U.S. economist at IHS Global Insight. “Deflation risks remain.”

Charles McMillion, president and chief economist at MBG Information Services, said, “The key concern now is for deflation, as vast overcapacity in virtually every industry worldwide leads to…loss-making price cuts.”

Prices in women’s apparel categories fluctuated. Price levels for women’s outerwear slid 2.8 percent in January and 5.9 percent year-to-year. Dresses increased 3.5 percent for the month, but fell 1.2 percent in 12-month comparisons. Suits and separates advanced 0.9 percent in January, but declined 5.2 percent from the same period a year earlier. Prices in the broad women’s underwear, nightwear, sportswear and accessories category slipped 0.9 percent for the month and 0.2 percent for the year. Girls’ apparel prices dropped 0.9 percent in January and 3.3 percent from a year earlier.

Men’s apparel prices were mostly up in monthly and yearly comparisons. Prices for men’s furnishings increased 0.6 percent for the month and 5.1 percent from January 2008. Shirts and sweaters were up 3.2 percent in January, but slipped 1.2 percent year-to-year. Pants and shorts rose 3.6 percent in monthly comparisons and 0.6 percent from a year earlier. Suits, sport coats and outerwear prices declined 1.5 percent in January and 3.8 percent for the 12-month period. Boys’ apparel prices increased 0.5 percent in January, but declined 0.9 percent year-over-year.

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