The fashion industry’s vital signs are showing hints of fiscal schizophrenia.

This story first appeared in the May 5, 2011 issue of WWD. Subscribe Today.

Shoppers are out spending, looking past higher gasoline prices, unemployment of 8.8 percent and continued turmoil in the housing market.

The MasterCard Advisors SpendingPulse showed strong growth in luxury, apparel and e-commerce sales last month, a reading that was aided by a late Easter and is expected to be confirmed when retailers report their own comparable-store sales today.

April apparel sales rose 10.4 percent from a year earlier, according to the broad measure of cash, check and credit card spending. Men’s apparel gained 12.4 percent, while women’s rose 7.4 percent — the segment’s strongest growth since May 2007.

The prospect of these sales and better profits has been goosing stocks. The S&P Retail Index, which slipped 0.62 points to 540.30 Wednesday, set an all-time high of 546.67 last week. But the outlook is murky, with companies still guessing about the impact of higher cotton, labor and transportation costs. The Dow Jones Industrial Average pared losses earlier in the day, closing down 83.93 points, or 0.7 percent, at 12,723.58.

Consumers are also watching their own costs rise. According to AAA, a gallon of regular gasoline inched up to $3.98 Wednesday, just 2 cents shy of the psychologically important $4 mark. Already, consultant Craig Johnson, president of Customer Growth Partners, estimates that the year-over-year rise in food and energy prices is cutting discretionary consumer spending by $21 billion a month.

Eventually, all the pressure on consumers and inflation in the supply chain is expected to catch up to producers.

Moody’s Investors Service reiterated its “stable” outlook for U.S.-based apparel makers, but said it was more likely to shift to a negative stance, with rising costs threatening operating profit margins.

“The primary risk is that consumers will push back, resulting in lower sales volumes that will cause retailers to mark down prices in order to unload unsold inventory,” Moody’s said.

But consumers are, after all, consumers and appear to be able to handle only so much austerity.

“We always return to some kind of homeostasis,” said futurist Edie Weiner, president of Weiner, Edrich, Brown Inc. “We go back to what we’re accustomed to. I’m not going to say that people are going to spend as much as they used to on the same things that they used to, but I think there are categories of spending that people won’t give up.”

Millennial consumers, for instance, are still going to spend for special occasions such as weddings. Their Baby Boomer grandparents are also going to put money into those occasions. And if younger people aren’t buying the big things, the houses and cars, they have more money for the smaller things, Weiner said.

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