WASHINGTON — Wholesale prices for domestically produced women’s and girls’ apparel fell 0.4 percent in June, after edging up in May, while retail prices have increased for three straight months, according to the Labor Department’s Producer Price Index released Thursday.

Prices for U.S.-made apparel and textiles have generally been falling for years because of low-cost import and retail price pressures. The 0.1 percent rise in May suggested some stabilization in pricing. There are no year-over-year cost comparisons in the majority of categories because many of the textile and apparel price sectors were reclassified this year by the Labor Department.

Producer prices for all U.S.-made apparel, which now represents less than 10 percent of clothing sold in the country, dropped 0.5 percent in June against May and were down 0.3 percent against June 2003. For all finished goods, producer prices declined 0.3 percent last month, primarily because of falling gasoline prices.

“You have an ever-increasing number of places in which you can produce an acceptable quality of apparel and textiles,” said Carl Steidtmann, chief economist at Deloitte Research. “As apparel becomes more of a free-trade item [with quotas being eliminated on Jan. 1], it will be reflected in declining prices and it will continue.”

Steidtmann said retailers and wholesale producers have both lost pricing power, although merchants have been gaining some strength in the last couple of months.

“If you go back to 1995, prices at retail have fallen faster than prices at wholesale,” he said. “It’s only been in the last couple of months that we have seen wholesale prices fall faster than retail. That means apparel retailers are actually adding a little to their margins.”

Retail prices for women’s apparel rose 1.3 percent in May against April and increased 2 percent compared with a year earlier, according to the Consumer Price Index. The Labor Department is set to release the June CPI today.

Among other categories for which the new index does provide year-over-year comparisons, wholesale prices for greige fabrics rose 1.8 percent in June and increased 4 percent against a year ago. Finished fabric prices edged up 0.1 percent last month and remained even compared with June 2003, while prices for yarns increased 0.3 percent in June versus 4.7 percent a year ago.

This story first appeared in the July 16, 2004 issue of WWD. Subscribe Today.

In the women’s and girls category, which includes apparel cut and sewn in the U.S., prices for skirts, tailored jackets and vests, jeans and slacks, swimwear, knit and woven shirts, and blouses and underwear remained flat in June. Wholesale prices for bras rose 0.4 percent in June, but were down 0.1 percent against a year ago.

In another new category based on apparel made in knitting mills, prices for sweaters, knit shirts, underwear and nightwear remained unchanged last month, while prices for pantyhose and tights fell 0.2 percent and prices for finished sheer hosiery dipped 0.6 percent.

Falling Prices
PPI One-Month Percent Change

SOURCE: BUREAU OF LABOR STATISTICS