Retail apparel prices fell a seasonably adjusted 0.1 percent in March, as flat prices in women’s and girl’s clothing helped to balance declines in men’s and boy’s apparel, the U.S. Labor Department reported Thursday in the Consumer Price Index.
The overall CPI increased 0.1 percent in March after declining 0.2 percent in February. The core index that excludes the volatile food and energy sectors rose 0.1 percent in March after increasing 0.3 percent in February.
In the women’s category, price decreases of 1.2 percent in dresses, and 0.8 percent in outerwear and the combined underwear, nightwear, sportswear and accessories group were offset by a 1 percent increase in suits and separates.
In men’s, an overall price decease of 2.5 percent was led by a 7.9 percent falloff in pants and shorts, a 3 percent drop in suits, sports coats and outerwear, and a 1.1 percent decline in shirts and sweaters. Furnishings was the only category to notch a gain, with prices rising 0.6 percent. Boy’s apparel prices fell 1.5 percent for the month.
The softness in men’s and boy’s prices likely stems in part from historically low cotton prices. Cotton prices averaged 57.06 cents a pound for the week to Friday, up from 56.11 cents s pound last week, but down from the 64.13 cents reported the corresponding period a year ago.
Chris G. Christopher Jr., director of consumer economics at IHS Global Insight, said the key driver in the overall CPI increase was a 2.2 percent spike in gasoline prices, while food prices fell into negative territory and core inflation fell back to a slower increase.
“There is good news and bad news from the consumer perspective in this report,” Christopher said. “Rising gasoline prices are not helpful for consumer mood or for those lower-income households that own a car. Grocery store prices fell into negative territory, a major plus for lower-income and middle-income Americans.”
Christopher said the pick-up in core consumer price inflation in January and February was most likely transitory, since the March report indicates that core goods prices went back into negative territory.
“The prognosis for the overall price story is that later this year and next year should morph from ‘falling goods prices’ to ‘slowly firming goods prices,’ all while services prices continue to be restrained but are gaining a smidgen of strength,” he added. “That should nudge price gains closer to Federal Reserve goals, but gradually.”