APPAREL PRICES UP 0.1%

Byline: Kristi Ellis

WASHINGTON — Domestic producer prices for all apparel rose 0.1 percent in November, reversing declines in October, the Labor Department reported Thursday.
Compared with November 2000, however, domestic apparel prices fell 0.9 percent.
Wholesale prices for domestically produced women’s apparel also rose 0.1 percent in November against October. Compared with November 2000, women’s apparel prices last month fell 1.4 percent.
“Demand is really weak, as shown in retail sales figures and this [slight increase in wholesale apparel prices] is not a reflection of a bounce back in demand,” said Charles W. McMillion, chief economist at MBG Information Services. “It’s a reflection of the fact that discounts have been taken about as deep as producers can go.”
Carl Steidtman, chief economist at Deloitte Research, disagreed that producer prices have hit rock bottom.
“My expectation is still a downward trend for apparel prices and I don’t see that changing until the dollar goes in a different direction,” Steidtman said. “Three things have contributed to the deflation in prices: the dollar, the shift to discounters and the effect of supply chain inefficiencies.”
Overall, prices at the producer level for all U.S.-made goods dropped 0.6 percent in November after falling 1.6 percent in October.
“Most analysts were not looking for such a steep drop in November,” said McMillion. “The drop in prices is dramatic.”
Women’s skirts prices posted the largest gain in November, increasing 1.1 percent against October, but declining 1 percent against November 2000. Wholesale prices for dresses rose slightly by 0.3 percent in November, but plunged 5.8 percent against year-ago levels.

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