Byline: Joanna Ramey

WASHINGTON — Deflation is keeping a foothold in the domestically produced apparel industry, the Labor Department reported Friday.
Wholesale prices for U.S.-produced women’s apparel declined 0.2 percent in February against January, wiping out a 0.2 percent gain from the prior month. Compared with year-ago levels, prices for women’s apparel at the producers level fell 1.6 percent in February, according to the Producer Price Index.
Wholesale prices for all apparel were off 1.3 percent for the year and were unchanged in February against January. Girls’, children’s and infants’ apparel prices were unchanged for the month and increased 0.5 percent from year-ago levels.
For all U.S.-made goods, wholesale prices last month edged up 0.2 percent against January, but plunged 2.6 percent for the 12 months ending February.
“Makers still don’t have a lot of pricing leverage,” said John Mothersole, senior economist at the WEFA Group. Apparel makers, in particular, undertook “some aggressive price cutting to clear out inventories.”
As far as the overall economic picture, Mothersole said the PPI shows no sign of creeping inflation, despite signs of higher energy costs.
Among the categories of women’s apparel tracked by the government with significant wholesale-price fluctuations in February was dresses, which fell 0.1 percent for the month and dropped 4.3 percent from year-ago levels. Nightwear prices were unchanged in February against January, but were off 4.1 percent over the 12 months, as bathing suit prices dipped 0.6 percent for the month and plunged 15.6 percent from year-ago levels.
Posting year-over-year price gains were blouses, up 3.4 percent, and knit sport shirts, up 3.8 percent. For the month, blouse prices were unchanged and knit outerwear sport shirt prices fell 1.4 percent.
Meanwhile, the Federal Reserve reported Friday that apparel production increased 0.2 percent for the month and was up 2.19 percent from year-ago levels, as textile mill production remained unchanged in February against January, but fell 9.8 percent over the year.
Capacity utilization rates for apparel in February were 66.8 percent, up from 66.5 percent in January, but down from 68.1 percent in February 2001. Textile capacity utilization last month was 72.3 percent, up from 72 percent in January and below last year’s 74.9 percent.

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