Fashion’s complicated relationship with price is only more so in inflation nation.
The U.S. Consumer Price Index for all goods and services rose a seasonally adjusted 0.9 percent in October where economists were looking for gain of 0.5 percent versus September.
The surprisingly large month-to-month gain added up to a 6.2 percent increase from a year ago, signaling both the impact of higher costs from the COVID-19-driven supply chain backups and government-supported consumer spending.
Fashion missed the latest rush up in prices, but has been generally moving with the market during the pandemic.
Apparel prices were flat in October from September, but were up 4.3 percent over a year ago.
That represents something of a mixed result for the industry. Women’s apparel prices were ahead 1.1 percent for the month and were up just 2.5 percent year-over-year. On the other hand, men’s apparel prices fell 0.4 percent last month, but are up a much higher 6.3 percent from October 2020.
Fashion brands from Ralph Lauren to Michael Kors and beyond have been looking to move their prices higher in recent years, getting off of the need-to-have-a-sale treadmill in favor of better profit margins and more cache.
And given years of bemoaning an out-of-hand approach to price promotion in fashion generally, the higher prices could be a welcome sign in some ways. But they aren’t coming in a vacuum and higher prices in apparel are competing with higher prices almost everywhere else.
A Country Financial survey conducted by Ipsos found that nine in 10 Americans are “highly concerned as inflation looms, altering spending habits and lifestyle choices.”
“As inflation rapidly affects everyday life, Americans are being forced to reckon with cutting back spending as the holiday season approaches, and moreover, postpone costly plans that have been in the making as the nation recovers from the COVID-19 pandemic,” Country Financial said.
The survey found that 29 percent of Americans plan to purchase less clothing given the increasing prices, which are increasingly apparent in gasoline, groceries, utilities and elsewhere.
In addition to making a little murky an already unusual holiday season in the midst of a pandemic, prices could dictate much of the economy into next year.
Stephen Stanley, chief economist at Amherst Pierpont, said in an analysis that the October report on prices “takes us to a totally different place for inflation, and certainly not a happy place.”
“This data confirms that price pressures are broad and broadening as well as accelerating,” Stanley said. “The odds are rising that what we are facing is an old-fashioned overheating economy, spurred by egregious amounts of fiscal and monetary stimulus. Moreover, the higher inflation climbs and the longer it stays at levels not seen for decades, the more likely that expectations will shift and that an elevated underlying trend will set in.”
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