WASHINGTON — U.S.-made apparel prices rose 0.4 percent in August compared with July, following several months of deflation, the Labor Department’s Producer Price Index showed Thursday.
On a year-over-year basis, domestic apparel prices increased 2.2 percent. Women’s and girls’ domestically made apparel prices edged up 0.1 percent in August but were 0.2 percent below a year earlier. Men’s and boys’ apparel prices increased 1 percent in August compared with July and were up sharply by 5.5 percent year-over-year.
The higher domestically produced apparel prices did not appear to come from U.S.-made inputs such as yarns, finished fabrics and greige fabrics, which all saw price declines or were flat. But one major price spike came in the input category of threads, which shot up 64.5 percent in August and were 90.4 percent higher than in August 2011.
Jeet Dutta, senior economist at Moody’s Analytics, attributed part of the apparel price increases to stronger back-to-school sales, as well as last year’s high cotton prices still making their way through the pipeline and higher transportation and energy costs.
Within the women’s and girls’ category, the largest increase in U.S.-made prices was robes and dress gowns, which rose 4.3 percent in August and were 6.1 percent higher than a year earlier. Prices on woven shirts and blouses rose 0.5 percent in the month, but were 6.4 percent lower than in August 2011. In the men’s and boys’ category, there was a significant spike in men’s work shirt prices of 16.2 percent in August but those prices were 3.5 percent lower than a year earlier.
While there has been much interest in increasing U.S. production, imports still make up an estimated 85 percent of all apparel sold at retail. The Consumer Price Index, which measures all goods sold at retail and is considered a bellwether on prices, is set to be released on Friday.
In the overall economy, wholesale prices on finished goods rose 1.7 percent in August, driven by higher energy and food prices. Core prices, excluding volatile food and energy prices, rose 0.2 percent.
Nigel Gault, chief U.S. economist at IHS Global Insight, said, “The PPI surge in August reflected higher energy and food costs, not a broad-based acceleration in inflation. The energy spike, led by gasoline, accounted for over 80 percent of the headline PPI increase of 1.7 percent.”
Gault said core finished goods inflation was “benign” at 0.2 percent, while core intermediate goods prices fell for the fourth month in a row.