By  on February 20, 2007

WASHINGTON — January wholesale prices on U.S.-made women's and girls' apparel increased 1.6 percent compared with the preceding month and were up 0.6 percent from a year earlier.

In the women's and girls' category, prices on knit shirts and blouses rose 2.9 percent from January 2006, while jeans and slacks were up 0.6 percent, according to the Department of Labor's Producer Price Index released Friday. Underwear prices fell 2.5 percent as dresses slid 1.5 percent for the month.

Even as the ranks of U.S. apparel producers have thinned — the industry employs 223,700 people, down 68.5 percent from a decade ago — some companies endure, particularly in niche markets where price is less of an issue. Trading only on price would make it hard to compete with foreign manufacturers, which tap into large pools of cheap labor to ship $93.3 billion worth of apparel to the U.S. annually, accounting for about 90 percent of goods sold at retail.

"A lot of credibility comes from having your denim produced in Los Angeles,"; said Steve Dubbeldam, co-owner of the Los Angeles-based denim company Iron Army.

The firm's jeans carry an average wholesale price of $95 and include high-end touches such as hand-sewing in addition to machine sewing and technical fabrics to add stretch with "memory.";

"Because of our price point, we don't have to be super concerned about moving a gigantic volume of product,"; he said.

On the textile front, where many producers also have gone toward specialty markets, January wholesale prices on synthetic fibers dipped 0.8 percent against a year earlier, as yarn prices rose 2.5 percent, greige fabrics increased 0.4 percent and finished fabrics went up 1.1 percent.

Together, apparel and textile prices advanced 1 percent last month.

Lower gasoline costs drove overall wholesale prices on U.S.-made goods down 0.6 percent last month, the first monthly decrease since October. Excluding the volatile food and energy sectors, so-called "core"; prices inched up 0.2 percent, in line with expectations and indicating no major changes in the inflation.

Economists, Wall Street and the Federal Reserve Board all closely watch prices for signs of inflation. If prices go up too quickly, the Fed will usually raise interest rates to moderate growth. However, if the Fed wants to encourage growth, it will generally lower the benchmark federal funds interest rate, which has been steady at 5.25 percent since June.The Consumer Price Index, which measures how much shoppers pay for goods and services and includes all goods sold at retail, will offer another reading on inflation when it is released Wednesday.

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