WASHINGTON — Overall apparel prices rose in August, but retailers struggled with pricing power in the women’s apparel category, the U.S. Labor Department’s Consumer Price Index showed Friday.
Apparel prices increased a seasonally adjusted 0.2 percent last month, driven by a 3.9 percent increase in girls’ apparel prices, a 1.2 percent rise in men’s apparel prices and a 0.4 percent increase in boys’ prices.
The one weak spot was in women’s apparel prices, which fell 2.4 percent in August.
Within the women’s sector, outerwear prices took the biggest hit, registering a 6.6 percent decline, followed by a 2 percent drop in suits and separates prices. Prices for dresses fell 1.9 percent, while prices for the combined underwear, nightwear, sportswear and accessories category saw a 1.8 percent decline.
In men’s wear, the combined suits, sport coats and outerwear category led the price increases, up 4.5 percent in August. Prices for pants and shorts rose 1.6 percent, while prices for shirts and sweaters increased 1 percent and prices for furnishings were up 0.8 percent.
The overall CPI rose 0.2 percent last month, driven primarily by increases in medical costs, while core prices, excluding food and energy, increased 0.3 percent.
“Core consumer prices in August were slightly stronger than expected. This places slight downward pressure on our estimate of third-quarter growth in real consumer spending, but not enough to move the dial,” said Chris G. Christopher, Jr., director of consumer economics at IHS Global Insight. “The overall story is that energy is no longer providing a consistent drag on the headline index, core goods prices are falling slower on a year-over-year basis and core service prices continue to climb the ladder.”
IHS is forecasting that the August core consumption price deflator — a key metric monitored by the Federal Reserve — rose 0.2 percent in August compared with July, while increasing 1.6 percent against a year ago.
“As the employment and retail sales reports were relatively weak, the Fed is unlikely to raise rates in September, but will wait to the end of the year to raise rates,” Christopher added.