WASHINGTON — U.S.-made apparel prices rose 0.2 percent in January after moderating in December, the Labor Department’s Producer Price Index showed Thursday.
“That increase was slightly puzzling to me,” said Jeet Dutta, senior economist at Moody’s Analytics. “Cotton prices are still way down and they have come down to where they were in mid-2010, which is when the big record-setting rally began. So that big price spike has been wiped, but it seems apparel prices are coming down more slowly.”
Dutta said some higher input prices could still be slowly filtering through the supply chain, but falling overall import prices should also bring down domestic prices.
In the overall economy, wholesale prices rose 0.1 percent in January. The core PPI index, excluding volatile food and energy prices and a key gauge of inflation, rose 0.4 percent, driven primarily by pharmaceuticals.
“Core producer prices, up 0.4 percent in January, showed their biggest increase since July, but that’s not cause for alarm,” said Nigel Gault, chief U.S. economist at IHS Global Insight. “Some price increases [particularly in the pharmaceutical area] were pushed through at the beginning of the year, but that doesn’t mean that the underlying rate of inflation has accelerated.”
Year-to-year apparel prices were up 3.8 percent. The men’s apparel category showed the biggest uptick in inflation, with prices rising 0.4 percent last month. On a year-over-year basis, U.S.-made men’s wear prices were up 7.5 percent. U.S.-made women’s apparel prices edged up 0.2 percent in January compared with December and were 1.7 percent higher than a year earlier.
While imports still represent the bulk of apparel sold at retail — a recent government report put it at 86 percent — a move to increase U.S. production could give PPI price fluctuations more weight. The Consumer Price Index, which measures all goods sold at retail, including imports, will be released on Friday.
In men’s, the work shirts category showed significant signs of price inflation, rising 17.9 percent in January and 13.2 percent year-to-year. Prices on U.S.-made underwear, nightwear and robes were up 2.9 percent last month and 8.2 percent from a year earlier.
In women’s, wholesale prices on dresses gained 1.3 percent in January and were 4.1 percent higher than a year earlier, while prices on bras and bandeaux edged up 0.6 percent in January and were 2.6 percent above a year earlier.
Further down the pipeline, yarn prices dropped 2.1 percent in the month and 1.7 percent for the year, while prices on finished fabrics fell 0.3 percent in January, but were 6.4 percent than a year earlier. Wholesale prices on gray knit fabrics increased 1.1 percent in January and were 12.1 percent higher than a year earlier. Prices on gray fabrics fell 3.8 percent last month, but were 4.2 percent higher for the year.