By  on August 17, 2011

As the roller-coaster ride of cotton prices — rising to record highs this spring before swooping lower the last two months — makes its way through the pipeline, wholesale prices on U.S.-made apparel and textiles continue to feel the impact, the U.S. Labor Department’s Producer Price Index revealed Wednesday.

Domestic apparel fabric prices were up 0.5 percent in July from a month earlier, and were 13.8 percent higher than July 2010. Within the broader category, cotton’s volatility can been seen in areas such as the 22.9 percent year-to-year increase in yarn price.

Deeper in the pipeline, prices for greige fabrics rose 5.3 percent in the month and 19.1 percent for the year, while knit goods prices climbed 3.9 percent month-to-month and 16.6 percent year-to-year.

Experts have said the easing of cotton prices — down to $1.03 a pound as of Friday compared to $1.49 in June and more than $2.00 in March — should help U.S. mills as they look to boost exports to places such as Central America and as firms look to make more goods close to home since Asian costs have escalated.

The overall PPI rose a seasonally adjusted 0.2 percent in July from a month earlier, as energy prices eased off. The PPI core index, excluding the energy and food sectors, was up 0.4 percent.

“This month’s 0.4 percent core price increase was the largest since January,” said Nigel Gault, chief U.S. economist at IHS Global Insight. “But pipeline cost pressures are beginning to ease, and we expect weak demand and weaker cost pressures to bring core inflation down over the rest of the year.”

The PPI for apparel isn’t considered a key indicator, since a small percentage of goods sold at retail is made in the country. The Consumer Price Index released today is a better gauge, since it measures all goods sold at retail, including imports.

But there has been renewed interest in producing more goods domestically, so it is worth noting that U.S.-made apparel prices were up 0.4 percent in the month and 2.9 percent for the year.

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