Byline: Joanna Ramey

WASHINGTON — Retail women’s apparel prices — in a deflationary mode for much of last year — rose a seasonally adjusted 0.6 percent in January from December, the Commerce Department reported Wednesday in its monthly Consumer Price Index.
However, analysts say the uptick doesn’t mean retailers will abandon their price-slashing strategies.
Compared with January 1994, women’s apparel prices last month were down 3.2 percent. All apparel prices increased 0.7 percent in January and were down 1 percent for the year, while the total CPI was up 0.3 percent for the month and 2.8 percent for the 12 months.
“The year-to-year numbers tell us the real story,” said Laura Baughman, president of The Trade Partnership Group, Washington, a trade and economic consulting firm, who expects deflation in apparel prices to continue well into the year. “Retailers are still competitive and are trying to keep their prices as low as possible and their margins are getting squeezed.”
The one-month increase in apparel prices is “not a trend,” concurred Bob Barr, deputy chief economist for the U.S. Chamber of Commerce here. With interest rates putting pressure on consumer spending and inventories increasing, retailers will continue to discount, he said.
The Chamber forecasts economic growth will slow in 1995 to 3 percent, compared with 4 percent last year. “Because of this slowing in the economy, we don’t think inflation will be a concern,” he said.
January’s slight increase in women’s apparel prices can be pinned largely on the fact that traditional first-of-the-year sales weren’t as widespread as previous years, since stores had already discounted apparel extensively in November and December, according to analysts and Labor economists.
The January hike is also in contrast with the 0.8 percent month-to-month drop in wholesale prices for U.S.-made women’s apparel posted in the January Producer Price Index.
The last time women’s apparel prices increased was 0.2 percent in October. January’s jump was the largest since a 0.9 percent increase last June.
Prices for coats and jackets fell 3.8 percent in January from December and were down 9.9 percent for the year. This reflected the lack of consumer interest in cold-weather apparel due to the unseasonably warm temperatures, a Labor analyst said.
Prices for dresses increased 4.9 percent in January, but posted a 5.7 percent decline from January 1994; separate and sportswear prices increased 0.2 percent for the month and were down 3.1 percent for the year. Prices for underwear, nightwear, hosiery and accessories rose 0.4 percent for the month and 1.2 percent over the year. Suit prices increased 1.1 percent in January and were unchanged in the year.
Prices for girls’ apparel were up 0.2 percent from December and were down 2.8 percent in year. — Fairchild News Service