WASHINGTON — Retail apparel prices inched up slightly in January though prices continued to remain weak in women’s and men’s categories, according to the Labor Department’s Consumer Price Index, released on Thursday.
Women’s apparel prices were flat in January, while men’s apparel prices fell a seasonally adjusted 0.5 percent. Boys’ and girls’ apparel prices showed the only sign of strength last month, increasing 2.1 percent and 4.9 percent, respectively. Apparel prices overall rose 0.3 percent in January.
“I think retailers are still being pretty cautious in terms of pricing power,” said Andrew Davis, an economist at Moody’s Analytics. “They know the consumer is [seeing] better wage growth but they are not completely there. I think they will be fairly cautious as far as marking up items so that they do not scare away consumers and lose out on sales.”
“Seeing that the PPI [Producer Price Index] is pretty weak, I wouldn’t expect apparel or core inflation in the CPI to meaningfully accelerate [in the short term] but it should stabilize. By the second half we expect an upward move in prices.”
But Davis said he does expect consumer prices to rebound later in the second half of the year.
“By the second half of this year, we will start seeing a significant acceleration in pricing power,” Davis said. “That relates back to the whole point of a stronger dollar.”
In the women’s category, dress prices fell 2.6 percent last month, while prices for suits and separates declined 1.2 percent. Women’s outwear prices rose 3.3 percent while the combined category of Women’s underwear, nightwear, sportswear and accessories remained flat.
In men’s wear, prices for furnishings fell 2.5 percent, while prices for shirts and sweaters dropped 1.5 percent. Prices for pants and shorts rose 1.4 percent and prices for the combined category of suits, sport coats, and outerwear increased 1.2 percent.
The overall CPI fell a seasonally adjusted 0.7 percent last month, driven primarily by falling gasoline prices, after declining 0.3 percent in December. Core retail prices, excluding volatile food and energy prices, rose 0.2 percent in January.
“Core goods prices were negative across the board, except for apparel which has awakened from holiday discounting,” said Kristin Reynolds, U.S. economist at IHS Global Insight.
“The core remains at 1.6 percent ahead of a year ago, as it was in December, with core commodities down 0.8 percent and core services up 2.5 percent,” Reynolds said. “The story remains the same: commodity prices are held in check by weak markets abroad and services continue to rise, with housing services the most important component of core, and the fastest growing, now 2.9 percent ahead of a year ago.”