WASHINGTON — Economic pressure on retail prices kept inflationary fears to a minimum in May, with the sharpest year-over-year decline in the Consumer Price Index since January 1950.
Retail apparel prices dropped for the third consecutive month, falling a seasonally adjusted 0.2 percent, while increasing 0.8 percent compared with a year earlier, the Labor Department said Wednesday in its CPI. Apparel prices also declined 0.2 percent in March and April.
Men’s apparel prices increased 0.2 percent in May and rose 0.4 percent year-to-year. Women’s apparel prices fell 0.8 percent last month, but rose 0.7 percent compared with May 2008. Different categories in apparel carry more significance in calculating the price increases and declines.
Prices for all goods and services increased a seasonally adjusted 0.1 percent in May, but fell 1.3 percent in 12-month comparisons, primarily because of lower energy costs. The so-called core prices, which exclude the volatile food and energy sectors, rose 0.1 percent.
“Today’s report on consumer prices suggests very little, if any, pressure on consumer prices,” said Brian Bethune, chief U.S. financial economist at IHS Global Insight. “The inflation genie remains well contained in the bottle and we should not expend a lot of energy worrying about it escaping under current depressed business cycle conditions.”
Overall prices dropped in a few categories, including apparel, Bethune noted, but most retail prices were in “slumber mode” and barely moved in May, he said.
Rather than inflation-affected retail prices, deflationary pressures seem to be spreading to a number of categories, said Charles McMillion, president and chief economist at MBG Information Services.
Retail prices for women’s outwear fell 3.4 percent month-to-month, but were up 4.9 percent compared with a year ago. The cost of suits and separates declined 1.5 percent in May and 1 percent year-over-year. The broad underwear, nightwear, sportswear and accessories category saw prices climb 0.2 percent in May and 0.8 percent in the 12 months. The cost of women’s dresses rose 5.1 percent in May and 7.7 percent year-to-year. Girls’ apparel prices increased 3.8 percent compared with April and 0.7 percent from a year earlier.
Men’s suits, sport coats and outerwear prices increased 1.6 percent in May, but fell 4.9 percent from a year earlier. Retail prices for men’s furnishings were down 2.3 percent in May, but rose 1 percent year-over-year. Shirts and sweaters increased 2 percent month-to-month and 1.2 percent year-to-year. Prices for pants and shorts were flat from the previous month, and rose 3.3 percent from a year earlier. Boys’ apparel rose 1.4 percent in May and 1.2 percent year-over-year.