WASHINGTON — Retail apparel prices rose a seasonally adjusted 0.9 percent in January compared with December, as merchants regained some pricing power after heavy discounting during the holidays, the U.S. Labor Department’s Consumer Price Index showed Friday.
Women’s apparel prices rose 1.2 percent in January, while men’s apparel prices rose 1.7 percent. On a year-over-year basis, all retail apparel prices were 4.7 percent higher last month compared with January 2011, as men’s prices increased 6.3 percent and women’s prices rose 4.2 percent.
The overall Consumer Price Index showed some new signs of inflationary pressure, increasing 0.2 percent in January. Core retail prices, excluding volatile food and energy prices, also advanced 0.2 percent in January compared with December.
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Within the men’s category, prices on suits, sport coats and outerwear spiked 6.3 percent in the month, while prices on pants and shorts rose 1.9 percent and prices for shirts and sweaters increased 0.1 percent.
In women’s, retail prices on suits and separates increased 2.7 percent last month, while prices on outerwear rose 0.4 percent and prices on underwear, nightwear, sportswear and accessories were up 0.8 percent.
“I’m thinking previous rounds of input price increases are still filtering through,” said Jeet Dutta, senior economist at Moody’s Analytics. “It would seem retailers are having success based on the apparel CPI.”
Dutta said he believes the pricing power that retailers regained was linked to tight inventory control management during the holidays.
“If the job market really does accelerate to a very strong pace, demand would also be accordingly strong and then retailers can have a modicum of pricing power,” he said. However, “If gas prices go beyond the $3.50-a-gallon range that we are in right now, that would hurt the pricing power in retail categories.”
Chris Christopher Jr., senior principle economist at IHS Global Insight, said the 0.9 percent increase in apparel prices was “transitory.” IHS is forecasting a moderation in retail apparel prices this year, as factors such as rising gasoline prices further dampen consumer confidence and purchasing power.
“By June, pump prices could surpass $4 a gallon solely on normal seasonal movements,” Christopher said. “The consistent upward ticking of gasoline prices will lower consumer mood even though there has been significant improvement on the jobs front.”