WASHINGTON — Retail apparel prices weakened in September, after three consecutive months of increases, as overall consumer prices inched up slightly, the U.S. Labor Department reported Wednesday in its Consumer Price Index.
Prices on all apparel sold at retail fell a seasonally adjusted 0.5 percent last month. Women’s retail apparel prices declined 1.5 percent, while prices for men’s apparel were down 0.6 percent. Girl’s apparel prices rose 1.4 percent last month, while boy’s apparel prices increased 0.6 percent.
Within the women’s category, retail prices for the broad category that includes underwear, nightwear, sportswear and accessories fell 2.4 percent in September, while prices for suits and separates dropped 1.7 percent. Prices for dresses shot up 5.3 percent, while retail prices for outerwear rose 3.4 percent.
In men’s wear, prices for pants and shorts fell 3.2 percent, while prices for shirts and sweaters dipped 0.7 percent. Prices for the combined category of suits, sport coats and outerwear rose 0.8 percent, while prices for furnishings were flat.
“When you have a run-up in prices for a few months straight, retailers do not need to raise their prices again and they also want to be a little cautious about not scaring the customer away,” said Jeet Dutta, senior economist at Moody’s Analytics. “They are taking a breather and allowing customers to absorb the price increases that have already taken place.”
Dutta said retail spending in general has not been healthy, which has played a role in keeping prices “subdued.”
“Given that we have not had very strong job growth — it has been modest at best — and wage gains have been paltry, most observers don’t expect retail spending to gallop ahead at a very strong pace,” Dutta said.
Moody’s is forecasting the overall CPI to advance less than 2 percent at an annualized rate for the next few months, based on softness in industrial prices further downstream, as well as in import prices, he noted.
“There is not a whole lot of need for retailers to raise pricing and very recently we saw consumer confidence take some hits, so that would make retailers even more cautious with pricing so as not to discourage consumers even more,” Dutta said.
The overall CPI edged ahead 0.2 percent in September and was up 0.1 percent in August. The core index, which excludes volatile food and energy prices, was up 0.1 percent last month.
“Soggy demand, weak energy prices, reversal of post-drought price gains in food, and relatively high unemployment rates are all slowly cooling price pressures,” said Chris J. Christopher, U.S economist at IHS Global Insight. “If one takes out food and energy prices, the picture is very subdued.…As we head into the holiday season, we expect retailers to start some heavy discounting in order to entice heavier spending by the American consumer.”
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