WASHINGTON — Wholesale and retail apparel prices firmed up somewhat in July, signaling the first signs of stability in pricing power in some time, as well as leaner inventories, economists said.

Two Labor Department economic indicators pointed to an easing of deflation in prices at the producer and retail levels in July, although pricing power remains weak.

Consumer prices for all apparel remained flat in July, but fell a seasonally adjusted 1.6 percent on a year-over-year basis, according to the Labor Department’s Consumer Price Index — a key inflation gauge — released Friday. Retail prices stabilized in July after increasing a seasonally adjusted 0.4 percent in June.

“Prices at retail have fallen every month until June, when they ticked up higher and remained at that level in July,” said Steve Spiwak, an economist at Retail Forward. “There has been a recent firming of prices on a month-to-month basis.”

But that doesn’t mean retailers are out of a deflationary pattern, yet.

“This is still a weak price environment, but it has eased up a bit,” said Spiwak. “But apparel deflation eased to its mildest pace of the year.”

Women’s apparel retail prices fell a seasonally adjusted 0.1 percent in July against June and slid 1.7 percent against July 2002.

Spiwak noted apparel specialty and department store inventory levels have increased at a slower rate in the past couple of months, which “alleviates some price pressures.”

“The combined impact of the two channels’ inventory positions helped firm up prices,” Spiwak said. “Retailers are doing a better clearing-off of store shelves through a lot of promotional activity.”

In the overall economy, consumer prices rose 0.2 percent in July, driven by rising energy prices, housing costs and tuition.

Among the categories of women’s apparel tracked by the government, retail prices for dresses fell 2.6 percent in July and plummeted 3.8 percent against July 2002, while prices for underwear, nightwear, sportswear and accessories fell 0.4 percent last month but inched up 0.8 percent against a year ago.

Consumer prices for suits and separates rose 0.9 percent in July but fell 2.6 percent against July 2002, while prices for outerwear rose 0.3 percent last month and inched up 0.2 percent year-over-year.In the Labor Department’s second report, wholesale prices for domestically produced women’s apparel in July showed signs of stability but remained stuck in a long-term deflationary pattern, according to the Labor Department’s Producer Price Index released Thursday.

Compared with July 2002, women’s wholesale apparel prices remained flat, as well.

All apparel prices remained flat against June, but fell 0.6 percent against a year ago. Wholesale prices for girls’ apparel remained flat in July, but rose 0.4 percent compared with July 2002.

“For people worried about deflation and the prospect of prices continuing to move lower, we can confidently say inflation has hit a low point now, with the PPI and CPI showing an uptick in month-to-month changes,” said John Mothersole, an economist at Global Insight. “They are not likely to move lower and could move up in the next couple of months.”

Charles McMillion, chief economist at MBG Information Services, was not as bullish about the wholesale price stabilization.

“Margins are so tight and producers have cut corners for so long that prices are as low as they can go,” McMillion said. “Producers are seeing price stability for the first time after seven years of steep price drops, and there is a limit to how low prices can go.”

McMillion claimed this is not a sign of pricing power for producers. “This is a sign that cost-cutting has gone about as far as it can go.”

In the overall economy, wholesale prices for all U.S.-made goods rose 0.1 percent, driven mainly by higher energy prices.

Among the categories tracked by Labor, domestically produced prices for sweaters, jackets and jerseys were flat in July but plummeted 9.4 percent against a year ago, while wholesale prices for knit outerwear, sport shirts and sweatshirts fell 0.1 percent last month and slid 4.5 percent against a year ago. Wholesale prices for skirts fell 0.7 percent in July but rose 0.4 percent for the year, while prices for dresses were flat last month but fell 1.2 percent against July 2002.

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