Retail apparel prices fell a seasonally adjusted 1 percent in March, after showing some pricing power the previous two months, the U.S. Labor Department’s Consumer Price Index revealed Tuesday.
It was the largest monthly decline in apparel prices since April 2001, according to the Bureau of Labor Statistics.
Women’s apparel prices fell 0.9 percent, after increasing 1.3 percent in February and 0.8 percent in January. Sarah Hutchinson, a Labor Department analyst, said it was more likely a seasonal adjustment rather then a return to a deflationary pattern in women’s prices, since they had risen the previous two months. Within women’s, prices for the combined category of underwear, nightwear, sportswear and accessories tumbled 1.4 percent, while prices for suits and separates fell 1.1 percent last month. Retail prices for dresses declined 0.9 percent and prices for outerwear fell 0.2 percent.
Men’s apparel prices fell 0.8 percent. In the men’s category, retail prices for furnishings dropped 3.8 percent, while combined prices for suits, sport coats and outerwear fell 2.1 percent last month. Prices for shirts and sweaters showed the only sign of strength, rising 1.6 percent.
The overall CPI Index, a key gauge of inflation, fell 0.2 percent, following a 0.7 percent increase in February. The March CPI was up 1.5 percent compared to a year earlier. Gasoline prices fell 4.4 percent last month following a substantial 9.1 percent increase a month earlier.
Core prices, excluding volatile food and energy prices edged up slightly by 0.1 percent in the month and climbed 1.9 from March 2012.
“Increases in consumer prices were diminished by declining energy prices,” said Leslie Levesque, senior economist at IHS Global Insight. “Gasoline was the major flagging index, while the energy services index was partially supported by an uptick in utility gas. This is the second consecutive month of notable increases in this index. Still, the decline in electricity kept a lid on gains in overall energy service prices.”
Levesque said energy will be a drag on the total CPI for several more months as oil prices have continued to retreat.
“The overall picture is almost benign and, with food and energy prices easing, the stress on the average household’s finances should ebb,” Levesque added.